UK News
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from Felix Salmon:
Europe’s insoluble problems
Mohamed El-Erian is calling for massive recapitalization of the banking system:
The global financial system is being refined "day in and day out," El-Erian said, and as a result the balance between public and private is shifting and regulation is altering. "This is not being done according to some master plan," but in reaction to a series of crisis management interventions.
None of these piecemeal policy moves restored confidence in the markets, he said. What is needed is a coordinated and simultaneous set of policy actions globally in four areas: restoration of credit markets, elimination of deteriorating assets from balance sheets, injecting capital quickly into the banking system, and regulatory forbearance.
Oh, wait, that was El-Erian back in October 2008. But he's saying something very similar now:
In addition to specifying higher prudential capital ratios, governments must now bully banks to act immediately. Where private funding is not forthcoming, which should now be the presumption for a growing number of banks, recapitalization must be imposed, in return for fundamental changes in the way financial institutions operate and burdens are shared.
from Felix Salmon:
Europe’s doomed fate
This is beginning to feel like 2008, complete with all the rumor and chaos and volatility we saw back then. MF Global is a bit like those Bear Stearns hedge funds which went bust -- an isolated datapoint in one respect, but ominous in many others. And right now the best case scenario is that Greece ends up being Bear Stearns, rescued by an international community petrified of what might happen in the event of a chaotic collapse.
But Greece being Greece, of course, a chaotic collapse has to be pretty much an inevitability at some point.
Mandelson slip-up confirms eurosceptics’ fears
Business minister Peter Mandelson built his reputation as a sure-footed communicator for the Labour Party, but the former EU trade commissioner suffered a rare slip-up on Friday when he confirmed many eurosceptics’ fears that the European Commission relished its lack of democratic accountability.
“The best principle of the European Commission ever invented was that it should not be elected — that it was remote, unaccountable, a major bureaucracy that could do good for Europe and can take the risks of saying things and doing things that are not as easy to do in the member states,” said Mandelson.
Is powerful Mandy talking up the euro?
When Prime Minister Gordon Brown reshuffled his cabinet last week, fending off a challenge to his authority, a significant outcome was the creation of one of the most powerful ministerial jobs Britain has seen in years.
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Peter Mandelson, a former European commissioner who has twice served in British governments in the past and twice been forced to resign, was reconfirmed as secretary of state for business, but also given greatly expanded authorities that make him a powerful if unofficial number two to Brown.
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The Wall
