The Great Debate UK

from Commentaries:

Shock! Banker says banks must shrink

One of the most depressing, though predictable, aspects of the financial crisis has been the reluctance of senior bankers to publicly debate the industry’s shortcomings.

Though there has been plenty of finger-pointing in private, bankers have refrained from discussing their own - and each other’s - failures in public. The result is that the debate about the future of banking has been almost entirely conducted by non-bankers.

Bert Heemskerk is an exception. Until a month ago, the 66-year old Dutchman was chairman of Rabobank, the Dutch co-operative lender. Since announcing his retirement, he has embarked on a public crusade for banking to rediscover its traditional roots. He has given lectures and interviews, and published a book with his analysis of what went wrong, and what should be done about it. It’s only available in Dutch, but the title - which translates as “A Healthy Shrinkage” - gives some idea of where he’s coming from.

I interviewed Heemskerk shortly before he retired, and found his views refreshingly blunt. (My write-up of the interview was published today by the Financial Times). Little of what he says that hasn’t already been said by regulators, academics and politicians. But it is still unusual to hear it from a senior banker. His perspective is also a welcome alternative to the measured, but self-serving, arguments against radical reform served up by the likes of Deutsche Bank’s Josef Ackermann.

Banks get mixed reviews from institutional shareholders

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Brendan Woods- Brendan Wood is Chairman of Brendan Wood International, a global intelligence advisory firm. Recently, BWI published the World’s TopGun CEOs as ranked by 2500 institutional investors, which provides insight into the executives in whom shareholders feel the greatest confidence. The opinions expressed are his own. -

Brendan Wood International tracks the competitive position of investment bankers in global and regional markets. It also compiles the confidence rankings of hundreds of global shareholders in corporate investments, including those in the world’s leading banks. As of mid-2009, the Brendan Wood Investor Panel found a mixture of sharp criticism, but also some occasional strong praise for these “newly refurbished” financial behemoths.

Shareholder confidence vs. value investing

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Brendan Woods- Brendan Wood is Chairman of Brendan Wood International, a global intelligence advisory firm. Recently, BWI published the World’s TopGun CEOs as ranked by 2500 institutional investors, which provides insight into the executives in whom shareholders feel the greatest confidence. The opinions expressed are his own. -

The Brendan Wood International’s panel of 2500 institutional investors suffered through last year’s markets believing value would somehow prevail. Those value investing “diehards” indeed died hard.

The stockmarkets: irrational nonchalance

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Laurence Copeland- Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -

Before the credit crunch, we had what I called a Prozac market. Investors on both sides of the Atlantic seemed to be in denial, as irrational as the people who end up in the bankruptcy court because for years they have kept on smiling while the bills piled up unopened.

Financial crisis might make opportunity for poor countries

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John Meadowcroft
- John Meadowcroft is Lecturer in Public Policy at King’s College London. He contributes to the Institute of Economic Affairs blog. The opinions expressed are his own. -

The present financial crisis may be understood as the hangover that inevitably follows a long period of excess. The contraction of world trade that it has brought is bad news for the citizens of least developed countries (LDC) who have not enjoyed the party but may now be required to share the costs.

Borrowing from the 1930s to solve the financial crisis

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Alan Beattie, FT Economics Leader Writer.- Alan Beattie is world trade editor at the Financial Times, and author of the recent book “False Economy: A Surprising Economic History of the World”. He studied history at Oxford and economics at Cambridge, and worked as a Bank of England economist before joining the FT. The opinions expressed are his own. -

Those who forget history are condemned to listen to historians going on and on about it, a fate almost as bad as listening to economists doing the same. (And I write as a double agent with a foot in both camps attempting the delicate task of bringing the two together in my new book)

from The Great Debate:

Conceptual problems in commodity regulation

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John Kemp Great Debate-- John Kemp is a Reuters columnist. The views expressed are his own --

The financial crisis and wild gyrations in commodity prices have exposed deep conceptual flaws in the way academics and regulators think about commodity markets that will force a fundamental re-think.

In particular, they have demolished three key main planks on which the laissez-faire approach to regulation has rested:

Don’t scapegoat the Germans for crisis

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paul-taylor– Paul Taylor is a Reuters columnist. The opinions expressed are his own –

A revisionist theory on the causes of the global financial crisis blames surplus countries like China, Japan and Germany as much as highly-leveraged, deregulated finance in the United States and Britain.

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