I had a double take at a story in the FT this morning:
Bob Diamond — the former head of Barclays who tried to buy Lehman Brothers before its collapse five years ago — has joined a chorus of criticism over the lack of progress in ending banks' “too big to fail” status.
Citing “insufficient” progress in ways to safely wind down failing financial giants, Mr Diamond has called for fresh international co-ordination to end the fragmenting approach to bank regulation.
Mr Diamond's comments — a rare public outing since his ejection from Barclays by regulators a year ago — reflect broader concerns among investors and officials that government powers to deal with the failure of the largest financial institutions are still inadequate.
Now he's right, of course. I'm not churlish: if a sinner converts there is, so I'm told (it's up to you whether you accept the authority of the teller or not) rejoicing in heaven.
But let's just muse on this for a moment. Bob thinks there should be global regulation to save bankers - because, let's be clear, that's what this intervention by him is really about. But what about global intervention for some other reasons?
How about intervention on tax havens to save tax payers?
Or intervention on the flows of capital to protect domestic economies?
Or even intervention on labour standards to prevent exploitation?
Do you know what? I think Bob could be on to something here.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Maybe Mr Diamond reflects today’s Telegraph, its International Business Editor Ambrose Evans-Pritchard reports that “Extreme forms of credit excess across the world have reached or surpassed levels seen shortly before the Lehman crisis five years ago, the Bank for International Settlements has warned”!
And continued “”All the previous imbalances are still there. Total public and private debt levels are 30pc higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets that are ending in a boom-bust cycle,” said Mr White, now chairman of the OECD’s Economic Development and Review Committee.”
Are risky loans greater now than in 2007?
Today, one coalition politician [Vince Cable] voiced a hint that things are not so rosy with ‘the recovery’.
Richard Murphy your blog is read and appreciated by me. As a numerate citizen I prefer graphs for information [than Venn diagrams – they are fun and communicate effectively, though]. Refer to the graphs in the link below.
http://www.telegraph.co.uk/finance/10310598/BIS-veteran-says-global-credit-excess-worse-than-pre-Lehman.html
Thanks
Harmonised banking ‘regulation’ is a key part of the US/EU free trade agreement(Transatlantic Trade and Invesment Partnership – TTIP). I suggest this is what Bob Diamond is supporting.
As with all the regulatory harminising, which is the main thrust of this trade deal even though Vince Cable would have you believe its about tariffs, this will inevitably mean harmonising down to the most corporate-friendly regulation, not least because it is essentially financial services pushing the deal.
The firms involved are generally transnational so lobbying on both sides, but the US regulators are resisting having banking regulation, with its absolutely fundamental role in the overall economy, being shoved in with chicken wings and pigs in trade deal manoeuverings. They think it should not be included in a trade agreement.
In fact, despite the EU pressure, it is still not decided if financial services will be included in the deal.
Bob Diamond? St Paul + Road to Damascus?