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w(h)ither financial regulation? June 26, 2009

Posted by Bradley in : financial regulation , comments closed

As the Financial Stability Board holds its inaugural meeting, and the IMF invites civil society to comment on IMF governance (here), Vince Cable at the New Statesman has a depressing assessment of what is going on with financial regulation reform in the UK:

It is deeply worrying that some of the most important policy questions for a generation are now being decided by default and in a political vacuum…The response to all these questions is a lazy, uncritical, self-serving one: that, bar a few regulatory tweaks that will need to be made, the previous regime was essentially fine….Yet it is only a matter of months since half of the British banking system collapsed and had to be rescued by the state through total or partial nationalisation.

I’m not sure that things are much better in the US. The administration’s reform proposals are much weedier than they might have been. ISDA is busy warning the FSA to be more careful and slower about introducing changes to regulation. And ISDA suggests that the FSA can learn from the policy discussions in the US:

…further levels of standardization may actually be of debatable value. In this area, the public-policy debate in the US is instructive. A number of end-user organizations have indicated quite clearly that, while they support the objective of greater systemic resilience, they oppose artificial limits on the range of contracts available to them. Their needs are only truly served by the ability of financial services firms to tailor contracts to their specific requirements.

Sounds like business as usual.

guardian highlights new fsa failing June 19, 2009

Posted by Bradley in : financial regulation , comments closed

Much of the investor education movement involves information provided by firms who hope to make money out of customers by seeming to be friendly to their needs. The Guardian’s disclosures about the FSA’s moneymadeclear website (“helping you with your money”) today perhaps suggest the UK needs a consumer protection regulator as much as the US does:

The FSA’s site, Moneymadeclear, was set up to provide easy-to-understand and independent information and tools to help consumers learn about financial products.
While the site offers purpose-built tools to help people compare mortgages and savings accounts, the only link for comparison sites on its cards and loans page is to LendersCompared.org.uk, which is paid for by the largest home credit companies in the UK….
The cheapest rate Guardian Money could find quoted on the LendersCompared site was in excess of 120% APR, while the most expensive – a £100 home collected loan from CLC Finance repaid in 15 instalments of £10 a week – has an APR of 1,303.2% APR.

languages of government June 18, 2009

Posted by Bradley in : translation , comments closed

I learned today (when I was looking for the Company Rescue Consultation document) that the UK Insolvency Service provides publications in:

Urdu, Traditional Chinese, Welsh, Sylheti and MP3.

who looks after the public interest ? June 18, 2009

Posted by Bradley in : governance , comments closed

Governmental (and quasi-governmental) statements and actions with respect to regulation are a bit confusing these days. Today, the Commission, in a communication about internet governance, makes the following statement:

It is also important to recognise that public attitudes have changed towards the concept of self-regulation in the wake of the financial crisis. When critical resources are concerned, whether they are banking systems or Internet infrastructure and services, there is now a higher and understandable expectation that governments will be more proactive than they may have been in the past in defending the public interest.

But of course, the public may be disappointed – many of those in charge are the same people who have been (and still are in some contexts) spreading the better regulation gospel.

uphill struggle for lecce framework June 16, 2009

Posted by Bradley in : Uncategorized , comments closed

The G8 finance ministers agreed the other day that:

For the market economy to generate sustained prosperity, fundamental norms of propriety, integrity and transparency in economic interactions must be respected.

But there’s regular evidence that this is an uphill struggle. Today the FSA announced the appearance in court of two lawyers charged with insider trading. Lawyers should surely know better (especially after O’Hagan) although they don’t seem to – insider trading is a pretty obvious breach of the law, and of propriety too.

departmental deck chairs June 8, 2009

Posted by Bradley in : Uncategorized , comments closed

The UK’s Department of Business, Enterprise and Regulatory Reform is merging with the Department for Innovation Universities and Skills to create a new department for Business Innovation and Skills (BIS). It’s not obvious what the point of this rebranding is. BERR isn’t even two years old – it replaced the old DTI in 2007. The reaction at science business isn’t exactly a ringing endorsement:

The announcement of the new department does not say if the remit of DBIS includes rearranging the canvas covered collapsible seating on the decks of large ‘unsinkable’ ocean-going liners at risk of hitting an iceberg.

real world social responsibility June 2, 2009

Posted by Bradley in : Uncategorized , comments closed

I just got back to Miami from the Law and Society conference in Denver, where I talked about my paper on credit rating agencies and heard about a lot of interesting work on regulation and governance in general and the financial crisis in particular. At the hotel where I stayed, part of a large chain, they had one of those environmental programmes which invited guests to re-use towels and sheets. These programmes don’t seem to me to work perfectly – even if you hang up the towels they sometimes seem to get replaced, and the rooms aren’t always adapted well to the need to hang up a used wash cloth, for example. I don’t mean that such programmes aren’t genuinely intended to be environmentally friendly, but the PR may be more splashy than any real impact. So this makes me wonder (and not for the first time) how real much corporate social responsibility is.