Margaret Doyle

Margaret Doyle's Profile

COLUMN –One cheer for Darling’s reform: Margaret Doyle

July 8, 2009

Margaret Doyle is a Reuters columnist. The opinions expressed are her own

By Margaret Doyle

LONDON, July 8 (Reuters) – Alastair Darling has ignored the first rule of holes: if you’re in one, stop digging. He could have produced a few motherhood-and-apple pie reforms of the banking system, to give the impression of activity. Instead, he has dug in, proposing an upgrade of Britain’s failed “tripartite” system of regulation.

No one expected him to admit as much, but the arrangement that split responsibility between the Treasury, the Bank of England and the Financial Services Authority (FSA), was doomed from the start.

Unfortunately, the Conservative opposition has already pledged to dismantle it and give more power to the Bank so, faced with political reality, Darling has plumped for reinforcing failure. His new “Council for Financial Stability” is effectively the tripartite authority on a statutory footing. It will be required to review the Bank’s and FSA’s publications on financial stability and to make public recommendations.

The FSA is also given a “statutory objective” to strive for financial stability.

It’s hard to see how this will make any difference. The FSA and Bank are engaged in a turf war, while Mervyn King, the Bank’s governor, revealed recently that the Treasury had not shared this White Paper (policy document) with him.

At the retail level, Darling’s introduction of a new “national money guidance service”, to be funded by a levy on the financial services industry, looks like an attempt to grab the headlines. Banks and insurers undoubtedly sell complex products whose main purpose is to generate fees but the FSA already has a mandate to protect and to educate the consumer.

He has also accepted the recommendations from Lord Adair Turner, chairman of the FSA, to oblige banks to have more capital and sufficient liquidity. However, he seems to have no more idea than anyone else quite how to do it.

He has resisted the temptation to split commercial banking from investment banking, instead requiring banks to “make a will” so that they are easier to wind up in the event of insolvency, thus limiting the damage to the rest of the economy. Again, much easier said than done.

Darling proposes to fix one flaw in Britain’s deposit protection scheme by pre-funding it. That looks like yet another demand on banks’ scarce capital. Better communication, coordination and transparency between regulators is needed to avoid another crisis. Unfortunately, as Lord Turner has himself admitted, they were not competent to spot the last one, and all the transparency in the world will not equip them to spot the next. Perhaps these measures are just motherhood-and-apple-pie, after all.

Comments

1. Dream
Step Only two. Carry out

 

Thank you for expressing that Cheryl… humor really does enjoy an incredible role throughout building good results so you must always uncover daily to have entertaining

 

some families the ones will not always make the decision to have kids and so they do the very best they could to make the very best of a new not really best circumstance. I have discovered your current responses rude or obnoxious unnecessary. When every person experienced cautious boost their families with income after that obviously that you will find true although not everyone can make choices determined by cash…xo

 

The particular rival to be feared is a whom by no means affects about yourself at all, but continues creating his own business greater constantly. – Mom Ford.
So correct, you just need to be sure somebody else is certainly not opponent but you

 

I would not think regarding starting up children only understand that I can’t provide my kids most what they need. I do not begin to see the point in marriage and achieving kids if you cannot nuture them properly and give the the proper schooling. It can be absurdity. lots of young families who may have kids and they do not have cash to feed all of them. Which is cruelty from our perspective. Of course, this depends around the a higher level education these people obtained.

 

Speed up the procedure however, not neglect to nonetheless live life. Whenever we start off thinking about income and initiate a small business when we have beyond higher education we usually miss a few of the beautiful things in life. It’s such as commencing children. You obtain betrothed, you might have young children and then anything that you need to do is good for your sons or daughters and you simply overlooked an element of living. Cancer Cure

 

I simply love mindset rates because they are ideal for retaining your head inspired and also encouraged.

 

My Favorite:
Genius is a pct motivation along with ninety-nine per cent sweating. Manley The. Thomas edison

 

inspirational quotes.. thanks a lot neil.. Insurance

 

Wow, superb weblog structure! How lengthy have you ever been running a blog for? you make blogging look easy. The whole glance of your web site is great, as well as the content!

 

If you’re still on the fence: grab your favorite earphones, head down to a Best Buy and ask to plug them into a Zune then an iPod and see which one sounds better to you, and which interface makes you smile more. Then you’ll know which is right for you.

 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  • About Margaret

    "Margaret Doyle is a Reuters Breakingviews columnist, based in London. She writes about investment banking. She has been a journalist for over 14 years. She has written for The Daily Telegraph and The Economist and presented various radio programmes for the BBC. She began her career as a consultant at McKinsey & Co. She has an economics degree from Trinity College, Dublin and an MBA from Harvard Business School, which she attended as a Fulbright scholar. She is a Conservative Member of Westminster City Council."
  • Follow Margaret