FTSE 100
Dow Jones

Monday, 20 July 2009

You read it here first, #2

As readers of this blog may have picked up, I have long been an advocate of the removal of the banking supervisory powers of the FSA and the return of the same to the bank of England, and that is due to be announced as Conservative Party policy, with the overblown agency return to its previous job of boxticking and front office compliance and "fit & proper"-ness checking.

The Conservatives have not gone with a full Glass-Steagall approach to the separation of deposit taking from investment banking, for the understndal reason that to do so unlaterally might simply cause the deposit taking/comeercial banking side to be taken over by foreign banks from jurisdictions with less rigorous approaches. That in itself is not necessarily a bad thing, but in harsh economic times there could be a flight of banking risk capital overseas. Why would we want to bank all of our spare cash with institutions that might simply stop lending in the UK to preserve capital back in the US, France, Germany or China?

No comments: