Thursday, June 25, 2009

If things are this bad in the UK, imagine how bad they must be in the USA

The governor of the Bank of England, in a statement before the UK House of Commons Treasury Committee, agreed that the current balance of powers and responsibilities is “a mess”. He maintains that the Bank’s powers are not as great as its responsibilities to maintain financial stability: “parliament must be clear that the Bank of England can only publish reports and make speeches.”

He made these statements in the context of the discussion regarding whether or not proper consultation is taking place between the Bank, the Treasury and the Financial Services Authority.

John McFall, the committee chairman, called the lack of communication at the top level between the Bank, Treasury and Financial Services Authority an unbelievable “communications black hole.”

If this is the situation in the UK, which has a single regulator for all the financial services, you can imagine what the situation is in the US with its multiplicity of overlapping state and federal regulators, which nevertheless leaves actual regulatory black holes through which the black horses of the economic crisis charged several months ago.

The only positive thing that can be noted is that the UK is also in a political mess with hardly any leadership at present, while the US has clear political leadership even if it appears that the leadership is not being exercised in the matter of how best to organise regulation and stabilisation of financial services. Sphere: Related Content

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