How to manage the gigantic financial cuckoo in our nest


	How to manage the gigantic financial cuckoo in our nest

JICWyllie

10-21-2009 12:25 PM

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tags:

1-policy, 1-stimulous, 2-consequences, 2-increase, 2-record, 2-risks, 3-forecast, 3-reported, 4-uk

JICWyllie says:

Government policy is seen to be "intolerable", along with the bankers' bonuses.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://www.clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/35254c6c-1530-41df-9479-eb4aaa43473e/A547B422-FE40-47C5-9E28-63B23EF80613/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1" href="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1" style="font-size: 11px;">www.ft.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1">According to the <A href="http://www.imf.org/external/pubs/ft/weo/2009/02/pdf/text.pdf" title="IMF: World Economic Outlook" target="_blank" class="bodystrong">IMF’s World Economic Outlook</A>, the outlay of advanced economies on capital injections, asset purchases, guarantees and liquidity provision amounts to 30 per cent of gross domestic product. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1">As Mervyn King, governor of the Bank of England, noted in a speech on Tuesday, “<A href="http://www.bankofengland.co.uk/publications/speeches/2009/speech406.pdf" title="The Bank of England: Speech by Mervyn King to Scottish business organisations" target="_blank" class="bodystrong">to paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform</A>.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1"><P>According to the IMF, writedowns on UK bank assets are going to be $604bn, against $814bn for the eurozone and $1,025bn for the US. Yet the US economy is roughly six times as large as the UK’s. The UK’s cuckoos are too big. Regulation must take these differences into account. </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1">as Mr King stresses, banks that are too big or important to fail cannot be expected to manage risk wisely</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1"><div align="center"><img src="http://content7.clipmarks.com/blog_cache/www.ft.com/img/1C4D8012-3277-44C3-83EE-909675C391DC" alt="Banking" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/97e0f540-bda9-11de-9f6a-00144feab49a.html?nclick_check=1">Open-ended insurance of weakly regulated institutions that take complex gambles is intolerable.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/A547B422-FE40-47C5-9E28-63B23EF80613/blog/" title="blog or email this clip"><img src="http://content8.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>