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Too Big To Fail Is A Thing Of The Past!
Your author was able to attend the 8th Annual European Financial Services Conference in Brussels earlier this week. There were certainly some interesting panelists and contributors, including European Commissioner Michel Barnier.
There were many different perspectives discussed, but as you may imagine, financial services regulations were high on the list.
In the main, these regulations would be aimed at investment banks – rather than retail banks – but ultimately, these guys are major influencers in the stock markets of the world. Even if you happen to be a North American reader, this is important. The US and EU are doing their best to make their legislation comparable. The potential situations are therefore important to any and every investor.
One element that was raised repeatedly was that of stopping ‘regulatory arbitrage‘. In other words, trying to find ways to stop big banks and hedge funds from shopping around to take advantage of the most suitable legal locations. It seems that those at the top of the EU and US financial regulatory agencies believe that this ability to sidestep many rules and responsibilities added to the scale of the financial crisis. They are almost certainly correct.
Another element that ought to make us all worry, was highlighted by David Wright, DG MARKT from the European Commission. Governments around the world do not have the appetite to fix things if they go wrong a second time. In other words, if the structural problems are not resolved, those considered too big to fail will be left to fail. The actual phrase was, “I have it on good authority from very high-level officials in governments around that world that if this happens a second time, all bets are off!”
The sudden resumption in fat bonuses could come back to haunt investment bankers!
These issues have implications for the entire global financial system. Take heed. Think carefully about your personal investments and just how liquid and real they are. Numbers on a screen are just that, numbers on a screen. You can’t eat them if times are tough…
Whilst at the event I arranged an interview with a speaker. Eddy Wymeersch is Chairman of the Committee of European Securities Regulators. I asked him about short selling and the steps required if bankers are to become more responsible.
Ann Mettler: Has the time finally come for Fiscal Sustainability?
The following opinion piece from Ann Mettler, Executive Director of the Brussels based think tank The Lisbon Council is kindly being republished from her blog.
I have had the pleasure of meeting Ann on a number of occassions and I can attest to her knowledge and commitment to seeing Europe become the economy that many of [...]
Breaking News: Confidence In Wall Street ‘On The Line’
This story from CNN shows just what denail the United States is in when it comes to Wall Street, financial services, money and reputation.
According to the story, it seems that confidence in Wall Street is ‘on the line’. Which line would that be?
Perhaps it is the final line that an economy will not [...]
Where Will The Next Global Financial Centre Be?
An odd question, I know. Isn’t the global financial centre New York? Why ask if it is changing?
My thoughts are becoming more and more based on the economic realities of life. The regions with the strongest economies have strong financial centres. People go to these places to access capital to help their company grow.
But isn’t [...]
Will The Euro Last?
I would like to draw your attention to this post at Financial Sense.
I think the post itself is pretty self-explanatory.
The reason for posting is simply that I have been a questioner of the Euro for many years. Politically, it was a masterstroke. Pure genius. But economically, it has always seemed like a flawed [...]
When Will The Next UK Recession Arrive?
That is a leading question, I know. But with the announcement of a general election being called by Gordon Brown for 6th May, the prospect of real financial change is looming.
Both major parties seem to have been pre-campaigning on spending cuts, fiscal restraint and responsibility. But only one of the parties is in power [...]
FSA Makes Insider Trading Arrests
In my post of last week, I argued that we don’t need more financial regulations, but instead need better enforcement of the existing regulations.
As if immediately demanded, arrests have been made in an insider trading ‘ring’ by the FSA and SOCA. The BBC reports here. It seems that the staff of three major firms [...]
Do We Need More Financial And Stock Market Regulations?
Over the last few days, the regulation of various types of financial operator and market have come in for attention. Everyone seems to agree, we need more financial regulations.
When I say everyone, I mean everyone in politics…
It is clear that when billions – many hundreds of them – have been used to ‘bail out’ major [...]
Have UK Property Prices Been Rising?
It seems that the subject uppermost in the minds of Brits is back in the news. No, not the weather. The other one. Yes, property prices.
Bearing in mind the awful state of the UK economy currently, can it be much of a surprise that property prices have fallen again?
I would like to contend (and as [...]
The WWF Says Make Space For Nature – Understanding The Economic Value Of Nature
Your author was fortunate enough to attend an excellent event last night. The Bavarian Permanant Representation In Brussels played host to WWF and ‘Make Space For Nature’ in this the International Year of Biodiversity.
The event had an excellent array of speakers. Hosted by HRH Princess Laurentien of the Netherlands were European Commissioner for the Environment [...]