Editor's letter
As Credit went to press, the City of London was an unwilling host to thousands of demonstrators, many marching with a confused message of "jobs, justice, climate". Their choice of targets seemed just as muddled: one focus was the Bank of England, which - whatever one's views of its current policies - is doing its best to find a way through the economic crisis.
Although many of the Square Mile's unwelcome visitors see 'protest' as a hobby, regardless of the cause, no doubt the protestors' numbers were swelled by people unused to taking to the streets, who feel understandable outrage at the turn in their fortunes as the downturn worsens. Credit has always pursued a strong editorial line that there were excesses in the system, and that the urgent - but not precipitate - necessity of some regulatory and procedural change is clear, even if the market has to some extent corrected itself, as markets do. We would, for example, be very interested to hear from anyone who's been sold a new CDO-squared recently.
But justifiable as some level of public grievance might be, it is absurd to lay blame exclusively at the feet of the bankers. Regulators and politicians are at fault too; especially here in the UK, where the tripartite regulatory system was much trumpeted, as was Gordon Brown's claim, as Chancellor of the Exchequer, to have abolished boom and bust.
But it's not just the powerbrokers in government, the financial wizards on structured credit desks, or yield-hungry institutional investors who are to blame. For all their evident and myriad faults, the system required participation from the consumer. No-one had to take a 100% mortgage, and for every aggrieved Icesave account-holder there's a saver who one day in the past congratulated himself on getting the 'best' interest rate, forgetting that interest is a measure of risk.
It would be too much to hope that the protestors in the City gave much thought to this truth as they clashed with the police. But on April 1 who did they think was working harder to effect a recovery? The thugs smashing their way into that RBS branch near the Bank of England, or the men and women at their desks?
Matthew Attwood.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
CFTC weighs third-party risk rules for CCPs
Clearing houses could be required to formally identify and monitor critical vendors
Why there is no fence in effective regulatory relationships
A chief risk officer and former bank supervisor says regulators and regulated are on the same side
Snap! Derivatives reports decouple after Emir Refit shake-up
Counterparties find new rules have led to worse data quality, threatening regulators’ oversight of systemic risk
Critics warn against softening risk transfer rules for insurers
Proposal to cut capital for unfunded protection of loan books would create systemic risk, investors say
Barr defends easing of Basel III endgame proposal
Fed’s top regulator says he will stay and finish the package, is comfortable with capital impact
Bank of England to review UK clearing rules
Broader collateral set and greater margin transparency could be adopted from Emir 3.0, but not active accounts requirement
The wisdom of Oz? Why Australia is phasing out AT1s
Analysts think Australian banks will transition smoothly, but other countries unlikely to follow
EU trade repository matching disrupted by Emir overhaul
Some say problem affecting derivatives reporting has been resolved, but others find it persists