-
-
Re: Merv King The Gov of the Bank of England
"There are only two ways in which the problem can - in logic - be solved. One is to accept that some institutions are “too important to fail” and try to ensure that the probability of those institutions failing, and hence of the need for taxpayer support, is extremely low.
The other is to find a way that institutions can fail without imposing unacceptable costs on the rest of society. Any solution must fall into one of those two categories. What does this mean in practice?"
What! He calls that LOGIC? Another retard or criminal.
Of course there are more then 2 options - in logic - the obvious third option is called a return to free markets and let these institutions fail!
There is NO such things as "too big to fail" what a complete scam.
who decides what is a "too big a cost to society is"? which society I ask? the society of fascist scumbags running the country?
If Bank of America, Goldman, and JPM all fail tomorrow then it will be a very, very small blip in history, a very minor social cost, and a huge benefit for average Americans.
and who decides if a company is "too big to fail" or "too important to society" ? LOL - in logic - yes you got your answer - central bankers - fascist scumbags running the world currently.
Last edited by MulaMan; October 20, 2009, 05:09 PM. -
Re: Merv King The Gov of the Bank of England
and what if a large part of the economic engine shut down because of the imbalances, is free markets supposed to solve the problem? If people band together to try to come to some workable solution are they condemning themselves to eternal damnation by adopting commie solutions rather than having faith that the market will come riding down in its sweet chariot to carry the less fortunate to a better place?Comment
-
Re: Merv King The Gov of the Bank of England
Calm down MulaMan -- he is actually agreeing with you.Originally posted by MulaMan View Post
Merv is calling for a break up of the big banks, so that they are small enough to fail without bringing down the whole system. Read it again.It's Economics vs Thermodynamics. Thermodynamics wins.Comment
-
Re: Merv King The Gov of the Bank of England
Here's the latest installment.Originally posted by Mega View Post
The FIRE economy lives on at No 10 Downing, No 11 Downing, and apparently inside Governor King's own rockpile on Threadneedle Street...
I couldn't find a digital version to access, but the print version of the article in the FT also included this [emphasis mine]:BoE deputy governor contradicts King's banking proposals
Paul Tucker, the deputy governor of the Bank of England (BoE), has become the latest senior figure to contradict Mervyn King's recommendations to split up the banks.
According to FTAdviser's sister paper the Financial Times, in a lecture at Barclays Mr Tucker said he did not like the notions suggested by the Bank's governor, demonstrating further divisions within the BoE.
The remarks came a day after prime minister Gordon Brown and the chancellor Alistair Darling rebuked Mr King's plans, claiming the problems in the system were more complex than he had suggested.
In the lecture Mr Tucker, who is responsible for financial stability, fired a broadside at Mr King's idea of cutting the banks down to size to ensure they were not "too important to fail"
Touted as a future governor, Mr Tucker contradicted Mr King with a call for a more flexible approach.
He said: "Personally, I do not much like the notion of a list of 'systemically important firms' because, as a previous generation of policymakers taught us, what proves to be systemic depends so very heavily on the circumstance."
Instead he called for financial reforms to focus on the handling of banks' bankruptcy and safeguards for taxpayers to avoid a repeat of the global financial crisis and the ensuing government bail-outs.
Meanwhile, Mr Tucker indicated the structure of banking was likely to remain broadly unchanged and conceded the Bank was now less certain about its ability to tame credit booms and busts.
In addition he further distanced himself from the governor, adding that his other comments on regulation would be "based on something like the existing structure of the banking system persisting".
Instead of splitting up banks now, Mr Tucker praised the idea of 'living wills' to enable failing banks to be split up at death, something Mr King also supported but said would come at the cost of innovation and efficiency in the system.
It would seem the financial sector interests have as much a grip on the levers of political power in Blighty as they do in the former colonies...;)"Mr. Tucker was keener on the idea [living wills], but added that since all proposals for future regulation "will sometimes prove flawed", a system of taxpayer support as a last resort should explicitly be provided on the understanding that the banks would pay the exchequer back in future..."
Comment
-
Re: Merv King The Gov of the Bank of England
It is worse than that. The FIRE "industries" is all Britain has today. There is still some manufacturing but the deficit there is enormous. There are no manufacturing industries where Britain has a clear lead over the rest of the world - unlike Germany and Japan which have almost a stranglehold on certain industries, Britain doesn't.Originally posted by GRG55 View PostHere's the latest installment.
The FIRE economy lives on at No 10 Downing, No 11 Downing, and apparently inside Governor King's own rockpile on Threadneedle Street... I couldn't find a digital version to access, but the print version of the article in the FT also included this [emphasis mine]:BoE deputy governor contradicts King's banking proposals
Paul Tucker, the deputy governor of the Bank of England (BoE), has become the latest senior figure to contradict Mervyn King's recommendations to split up the banks.
According to FTAdviser's sister paper the Financial Times, in a lecture at Barclays Mr Tucker said he did not like the notions suggested by the Bank's governor, demonstrating further divisions within the BoE.
The remarks came a day after prime minister Gordon Brown and the chancellor Alistair Darling rebuked Mr King's plans, claiming the problems in the system were more complex than he had suggested.
In the lecture Mr Tucker, who is responsible for financial stability, fired a broadside at Mr King's idea of cutting the banks down to size to ensure they were not "too important to fail"
Touted as a future governor, Mr Tucker contradicted Mr King with a call for a more flexible approach.
He said: "Personally, I do not much like the notion of a list of 'systemically important firms' because, as a previous generation of policymakers taught us, what proves to be systemic depends so very heavily on the circumstance."
Instead he called for financial reforms to focus on the handling of banks' bankruptcy and safeguards for taxpayers to avoid a repeat of the global financial crisis and the ensuing government bail-outs.
Meanwhile, Mr Tucker indicated the structure of banking was likely to remain broadly unchanged and conceded the Bank was now less certain about its ability to tame credit booms and busts.
In addition he further distanced himself from the governor, adding that his other comments on regulation would be "based on something like the existing structure of the banking system persisting".
Instead of splitting up banks now, Mr Tucker praised the idea of 'living wills' to enable failing banks to be split up at death, something Mr King also supported but said would come at the cost of innovation and efficiency in the system.
It would seem the financial sector interests have as much a grip on the levers of political power in Blighty as they do in the former colonies...;)"Mr. Tucker was keener on the idea [living wills], but added that since all proposals for future regulation "will sometimes prove flawed", a system of taxpayer support as a last resort should explicitly be provided on the understanding that the banks would pay the exchequer back in future..."
After the collapse of the Pound (long overdue), Britain will become like Portugal or Spain (or may be Greece) - except for the weather (which is much worse).Comment
-
Re: Merv King The Gov of the Bank of England
BRING IT ON!
I am watching the "BMW count" & its falling!
MikeComment
-
Re: Merv King The Gov of the Bank of England
The Bank of England now understands 1/3 of the problem: Banks can not be bailed-out forever because of the moral hazard of under-writing risk-taking. So, banks are going to be regulated, watched closely, and maybe allowed to fail. (GOOD!)Originally posted by Mega View Post
Here is the 2/3 of the problem that the Mervin King missed:
a.) Money is intrisically worthless because it is backed by nothing at all, so risk-taking is encouraged by bankers and everyone else.
b.) Money has no cost of interest because interest rates are zero, again encouraging risk-taking by bankers and everyone else.Comment
-
Re: Merv King The Gov of the Bank of England
Maybe in Liverpool Mega, but not in Central London from what I saw over the past 4 days there.Originally posted by Mega View Post
On arrival I couldn't check into my hotel [on Park Lane, close to the Dorchester] until 4:00 pm because the place was fully booked and when my room did not become available on time, they didn't have an alternate.
Talking to the staff in my hotel and the restaurants that we went to in the immediate area the story was always the same...things were slow earlier in the year, but everything has picked up very significantly since August.
For a lark, to collect another data point and, yes, to oogle the convertible on the floor, I wandered into the Aston Martin dealership on Park Lane. Apparently sales of these rather expensive toys are up y-o-y, and they are expecting a couple of great quarters based on the current pace of inquiries they are getting...seems this business lives and dies on the City bonuses, which are expected to be quite good this year, in spite of the whinging from Whitehall [whinging is Britspeak for "whining" for us North American colonials, btw].
The whole mood in Central London [which is a world of it's own, mind you] seemed incredibly upbeat to me. Met with a former employee of mine who now works at a boutique mining finance firm out of an office in Mayfair...after a tough winter/spring/summer, deal flow is brisk [although investors are driving hard bargain terms compared to the good 'ol days]. They had just finished raising funds for the development of a coal mine of all things.
I'll bet there's a decent pop in the transaction volume and prices of top end Central London properties on the back of the bonus season. Amazing. Bloody amazing...Last edited by GRG55; October 28, 2009, 12:59 PM.Comment
-
Re: Merv King The Gov of the Bank of England
Apparently Mervyn King has at least one fan...Originally posted by GRG55 View PostHere's the latest installment.
The FIRE economy lives on at No 10 Downing, No 11 Downing, and apparently inside Governor King's own rockpile on Threadneedle Street...
BoE deputy governor contradicts King's banking proposals
Paul Tucker, the deputy governor of the Bank of England (BoE), has become the latest senior figure to contradict Mervyn King's recommendations to split up the banks.
According to FTAdviser's sister paper the Financial Times, in a lecture at Barclays Mr Tucker said he did not like the notions suggested by the Bank's governor, demonstrating further divisions within the BoE.
The remarks came a day after prime minister Gordon Brown and the chancellor Alistair Darling rebuked Mr King's plans, claiming the problems in the system were more complex than he had suggested...;)
From the NYT [courtesy of Barry Ritholtz - The Big Picture blog]:
Letter
Volcker’s Advice
Published: October 22, 2009
To the Editor:
Re “Volcker’s Voice, Often Heeded, Fails to Sell a Bank Strategy” (front page, Oct. 21):
As another older banker and one who has experienced both the pre- and post-Glass-Steagall world, I would agree with Paul A. Volcker (and also Mervyn King, governor of the Bank of England) that some kind of separation between institutions that deal primarily in the capital markets and those involved in more traditional deposit-taking and working-capital finance makes sense.
This, in conjunction with more demanding capital requirements, would go a long way toward building a more robust financial sector.
John S. Reed
New York, Oct. 21, 2009
The writer is retired chairman of Citigroup.
Comment
For a concise, readable summary of iTulip concepts developed over the past 16 years and a vision of a challenging next decade and how to navigate it, read Eric Janszen's book "Post Catastrophe Economy".
Join the discussion of today's events with a wide range of professionals with an interest in economics and finance. Register to join our 50,000 plus member registered community from 78 countries today.
Subscribe to iTulip Select for access to the longest running, deep, accurate, and unvarnished macro economic trends analysis and forecasting available, since 1998.
- If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.
Working...
Tweet
Comment