metaplace September 18, 2007
Posted by Bradley in : Uncategorized , comments closedMuch more cheerful than what is happening in the financial markets is the announcement that Metaplace went live today at TechCrunch40. Not too many details yet, but they do have cute pictures….
It’s a venture headed up by Raph Koster and John Donham which is designed to allow people to build their own mmorgs. The announcement states:
Our goals are sort of idealistic. We think there are all kinds of things on the Internet that would be improved if anyone could have a virtual place of their own. Right now, there aren’t enough good games, for example, and they all seem to be about elves in tights or soldiers in battle armor. Metaplace allows more diversity. Right now, there are lots of people who want to use virtual worlds for research, or education, or business, but it’s just too darn hard to get one going. Now you can create a world in just a few minutes and start tailoring it to your needs. Basically, we wanted to democratize the process of making online spaces of all sorts.
statement of the uk chancellor September 17, 2007
Posted by Bradley in : Uncategorized , comments closedDarling on Northern Rock and investor distrust:
I want to put the matter beyond doubt. In the current market circumstances, and because of the importance I place on maintaining a stable banking system and public confidence in it, I can announce today that following discussions with the Governor and the Chairman of the FSA, should it be necessary, we, with the Bank of England, would put in place arrangements that would guarantee all the existing deposits in Northern Rock during the current instability in the financial markets.
This means that people can continue to take their money out of Northern Rock. But if they choose to leave their money in Northern Rock, it will be guaranteed safe and secure.
generic financial advice September 17, 2007
Posted by Bradley in : Uncategorized , comments closed…looks really boring. And there’s a statement at the bottom of the web page:
For a statement on Northern Rock plc please visit the FSA website.
The Treasury Press release stated that generic financial advice would also be available from A4e. When I visited their web site just now the most likely place to look for generic financial advice seemed to be a link under the heading Financial Inclusion and Education which took me to a page headed Moneyhelp – supported by HBOS but I’m not sure if that is the right place to look.
more troubles at northern rock September 17, 2007
Posted by Bradley in : Uncategorized , comments closedSavers continue to withdraw funds despite this announcement by Callum McCarthy of the FSA on Saturday:
To be absolutely clear, if we believed that Northern Rock was not solvent, we would not have allowed it to remain open for business. It is open for business and it can continue to receive deposits and allow customers to make withdrawals.
The Chief Executive of Horthern Rock stated on Sunday:
Your money is safe with us and if you want some, or all of it back, then you are perfectly entitled to it. Whilst you may have to wait a little longer than usual to receive it, you will get it. However, your savings are secure and there is no need for you to withdraw your money based on our recent announcement, and the widespread media coverage that has ensued. The Bank of England has agreed to provide a funding facility to enable us to manage through the current global liquidity crisis. They would not have done so, if we were not a solvent, adequately capitalised, well run bank. I hope this helps to reassure you.
Meanwhile the Guardian and the BBC are remembering the UK’s secondary banking crisis in 1973.
more weirdness at the consumer direct website September 15, 2007
Posted by Bradley in : Uncategorized , comments closedAfter reading the material on Christmas savings plans at Consumer Direct, I started to read the advice about borrowing money, and then started looking at the suggested template letters for complaining to providers of goods and services. All well and good. But I noticed that there’s an odd picture at the edge of the web page showing a partly clothed woman wearing a construction helmet. What does she have to do with complaint letters, I wonder? Well, she seems to be related to advice about holidays – presumably the reference is to people turning up for their holiday to find the hotel they are staying in is only half built. But she turns up on pages that have nothing to do with holidays, and, in any case, why don’t they have a picture of a man in surf shorts and a construction helmet? It turns out they do have pictures of men – one is wearing a lurid green sweater that looks as though it shrank in the wash, another older bald man in a pale blue shirt is holding a steering wheel and looking as though he is about to crash into something. There’s another woman too – this one is covered in food that seems to have escaped from a faulty blender. The nearly naked woman is the only one of the bunch who looks remotely intelligent or capable…..
musings on financial education and christmas savings September 15, 2007
Posted by Bradley in : Uncategorized , comments closedThe UK Treasury set up an independent review of generic financial advice (the Thoresen review). Next week there will be a pilot of face-to-face, internet, and telephone generic financial advice.
In looking at the Consumer Direct website to see if there is any information available before the launch (scheduled for Monday 17 September) I came across (post Farepak collapse) pages on Christmas savings. There is a handy comparison chart, which shows the differences between various products. I find it a bit confusing that the chart uses large green ticks (UK term) or check marks (US term) to identify product characteristics. I would assume such a marking reflected a positive attribute, but products which require you to buy from a particular supplier have a nice big green tick/check mark, and I’m not sure that is a desirable feature.
There is also a set of pages with pictures of Christmas tree baubles in different colours. These baubles do not seem to be intended to be colour coded to reflect the desirability of the products. Bank savings accounts have a green bauble and credit union savings accounts have an orangey-red one although the descriptions of these products are unsurprisingly very similar. But don’t the colours send an implicit message about the different products, especially given the move to traffic light markings on foods in the UK?
liquidity support for northern rock September 14, 2007
Posted by Bradley in : Uncategorized , comments closedThe UK Treasury, the Bank of England and the Financial Services Authority issued a statement about the liquidity support provided to Northern Rock, the 5th largest mortgage lender in the UK, by the Bank of England. Northern Rock issued its own statement. Depositors panicked and Northern Rock kept branches open late. Northern Rock’s share price fell sharply.
The regulators have emphasised that the problem is one of liquidity rather than of asset quality. Clearly there is not universal confidence in this view. Deposits who deposit up to £35,000 are protected, and would receive most of their money back if they deposit money in a bank that fails. Perhaps UK depositors are thinking of the collapse of the Farepak Christmas savings scheme towards the end of 2006.
Northern Rock used to be a building society, but transformed itself from a mutual business into a for profit enterprise. Northern Rock relies more heavily on capital markets to fund loans than its competitors do, and this contributes to its current liquidity problems: if it can’t raise funds in the market it can’t continue to lend. But although this may be more of an issue for Northern Rock than for other lenders one visible trend over recent years has been an increased reliance by lenders on the financial markets as a source of funds for their lending business.
Willem Buiter critiques the Bank of England’s actions here and here.
student paper topics September 13, 2007
Posted by Bradley in : Uncategorized , comments closedThe American Constitution Society has developed an online resouce, Researchlink, with suggested paper topics in various areas. The resource is designed to further the needs of public interest organizations.
eu opacity September 12, 2007
Posted by Bradley in : Uncategorized , comments closedAfter the previous post suggesting the EU tends to transparency I have to link to this euobserver article reporting journalists’ discomfort with EU opacity.
financial trade associations and transparency September 12, 2007
Posted by Bradley in : Uncategorized , comments closedI have an ongoing research interest in financial trade associations as private rule-making and standard-setting bodies and as lobbyists on financial regulation. ISDA is one of the FTAs I am interested in. One important focus of ISDA’s attention is encouraging jurisdictions around the world to recognise netting. Today I noticed that ISDA made a submission a couple of days ago on Proposals to Achieve Confirmation of “Enforceability of Close-Out Netting in Malaysia under the Malaysia Deposit Insurance Corporation Act 2005†to Perbadanan Insurans Deposit Malaysia, the Malaysian Deposit Insurer. PIDM makes it clear that the consultation follows representations by ISDA, and notes the importance of transparency. However, ISDA’s recent submission to PIDM is not generally available, although it is available to ISDA members. Other ISDA comment letters which are not publicly available are comments to the Reserve Bank of India on Derivatives and on Credit Default Swaps. Comment letters to US and EU bodies on the other hand are publicly available. I am intrigued by this contrast: it’s not clear to me whether ISDA’s approach to publication of its comments is driven by deference to the preferences of the bodies to which it makes submissions or by something else. The SEC and EU bodies such as the Committee of European Banking Supervisors (CEBS) publicise responses to their consultation documents and rule-making proposals, whereas PIDM states:
PIDM will collate all the comments received and publish its responses, including any amendments to the draft Regulations and draft Policy Statement, on its website. The draft Regulations will come into force after the normal legislative process.