Banking
G20 fails to act
CEOs of banks that rigged markets must go
People know we haven’t cracked the problem. Anaemic, faltering growth has brought a sense of greater security and well-being only to those in work or those with assets like shares and city property that have floated up on the rising tide of central bank liquidity. Since 2007 vast disparities of wealth have become even…
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What major monetary and banking reforms are needed?
Enough deceit!
The global financial crisis should be seen as a symptom of the lack of fit between three pieces of the jigsaw of modern finance – national or regional monies, innovative financial markets and a globalized financial system. It provided both an encouragement and a warning – an encouragement to search for alternatives…
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1. The case for a global monetary standard
All major economies remain stuck in The Money Trap. The way out is to adopt a new monetary standard, the Ikon
Introduction To be in the trap means two things: The international monetary anti-system: Governments are in the trap when they act in the belief that if they get monetary, regulatory and fiscal policy “just right” for their own economies, they can achieve their aims – full employment, growth, stability – without paying attention to the…
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2. For and against reform
We should start building a consensus on world money
What are the forces favouring reform – and those obstructing it? Natural development: There is a natural tendency for a dominant currency to emerge as the de facto global currency. The US dollar has served that purpose and inertia keeps it in the leading place. But It is in the interests of the US…
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3. New models for banking and international money
Concluding this three-part article
We need radical new models of international money as well as global banking and finance. The underlying purposes are to re-connect finance with the real world and to put individual responsibility and risk-bearing capacity back at the centre of the system. There is an important role for governments, which must agree and set…
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Adair Turner (1): Right on the case for radical reform
Current measures "work" by stimulating the very growth in debt that got us into this mess
One person who fully grasps the urgent need for more radical reforms is Lord (Adair) Turner, former head of Britain Financial Services Authority. He also specifies what reforms he feels are needed and makes an eloquent plea for them. These two features set his contributions apart from 90% of writings on the topic. Here I…
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Caveat: I should mention to begin with that this critique is based on Lord Turner’s paper on “Escaping the Debt Addiction”; one paper cannot cover every area and he has (I understand) written a soon-to-be-published book that will presumably range more widely. The approach in this paper can be compared with that developed…
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The bare bones of a new policy regime
It should comprises two elements - a new international monetary system and a new banking system
As argued in the post “Regime Uncertainty Undermines Confidence”, only a new policy regime, not changes to individual policy areas (such as regulatory policy) will reduce the existential angst that is crippling business and over-shadowing the recovery. New money….. It should establish a global currency standard. The standard should be sufficiently attractive that countries…
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Prospects for 2014
Are central bankers dancing to the markets' tune?
Markets and banks are kept afloat not so much by past QE but by the expectation that central banks will double up on it if markets should collapse again. Have asset prices become de facto the new monetary standard? From a longer-term perspective, and contrary to conventional wisdom, this could be a move…
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Let new model banks thrive
….and decently bury the old
In this week’s FT Money (25/26 January) , Merryn Somerset Webb, editor-in-chief, has some interesting remarks on banking. She points out that customers have new, and often better, ways to borrow than “via the traditional fleecing machines with their pricey real estate and unreliable IT systems”. There are new entrants to the market,…
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