RP’s Diary
New entry to Bank of England governor stakes
Former UK Treasury mandarins jostle for top job
My apologies to subscribers who – following my tip – have placed bets on Gus O’Donnell to be next Bank of England Governor (RP’s Diary 14/09/12). They might lose their money. How did I come to overlook the irresistible charms of (Lord) Terry Burns? Terry is a pukka economist who followed a respectable academic…
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Banks that go bust
Why the IMF is on the wrong track
One of the lessons of FinCR (financial crisis and recession) is clear. We have to get better at stress-testing. That is, we have to understand better than we did what circumstances can push banks over the edge into insolvency, and how regulators can spot weak banks in advance. Or so the story goes. The…
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Tectonic plates shift
The future of banking hangs in the balance
There is a short and a long-term way to view the debate on structural reforms in banking. Short term, the question is, will the EU’s Liikanen knock out the UK’s Vickers? Or will Vickers prevail? The recommendations are mirror images of each other, one ring-fencing so-called retail banking the other ring-fencing the investment banking bit….
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Volcker, Lagarde, Rees-Mogg and the Ikon
Why a monetary standard is needed
Lord Rees-Mogg, former editor of The Times, London and doyen of British commentators, has called for a reform of the global financial system (GFS). Rees-Mogg quotes Paul Volcker, who in a recent interview described the present period as one of the most difficult in history: “This is a recession on top of a complete financial…
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The IMF gets radical
Inadequate, slow and badly-designed reforms
To some people’s surprise, the IMF under Christine Lagarde is pushing governments and stamping its authority on financial sector issues in ways that it has seldom done before. Following my prediction of another financial crisis (RP’s Diary, 23 September), the IMF today argues that banking reforms do not go nearly far enough. The reforms have…
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Towards the next crash
The next financial crisis can’t come fast enough.
The political tide is backing off the banks. Few politicians in Europe or the US are willing to support moves for more radical reform. They just want to get the banks lending again. In practice, that means pressing banks to accept the risk of big bad debts down the road…and so set the stage for…
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Did unethical conduct cause the crisis?
RP's Diary
Dropped in to the Institute of Economic Affairs (IEA) to hear a talk by Dr Elaine Sternberg (she is the author of “Just Business: Business Ethics in Action”, a research fellow of the Centre for Business and Professional Ethics at Leeds University and IEA’s corporate governance guru; not many philosophers have also been entrepeneurs…
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Even before today’s job ad in The Economist, it is clear who will win the race. GOD, in the shape of Baron Augustine O’Donnell, former head of the British civil service, is set to be the next governor of the Bank of England. For a start, the job spec indicated that only superhumans need apply….
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Come on guys!
RP's Diary
Hello! Back to the grindstone after the holidays. This Diary entry draws on evidence I submitted last week to the Parliamentary Commission on Banking Standards. It examines the link between the failure of money and continuing economic weakness. How long will it take governments to realise that we will never get a lasting recovery without…
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The financial crisis that began on this date in August 2007 has not ended. It continues, and will continue so long as policy-makers and economists fail to learn its lessons. Instead, what we have is a mountain of hypocrisy. Almost everybody is being economical with the truth. This applies to central bankers, financial regulators and…
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