Regular readers know that your humble blogger views bringing transparency to all the opaque corners of the financial system as a critical element in bringing the financial sector back under control.
The reasons are simple:
- Sunshine is the best disinfectant; and
- With transparency, that market can exert discipline on and restrain the risk taking of each bank.
But as it stands, all three major [UK] parties seem to be in the same camp: implementing the Vickers report which mandates the untested "ringfencing" of investment and retail banking plus more capital reserves – in 2019.
If there is a fundamental, paradigmatic difference in approach between the government and the opposition, the public has yet to be told about it.
This is not how democracy is supposed to work, and the consequences can be felt with every new scandal. In the absence of a credible alternative vision about financial reform, we are left with outrage and futile symbolism each time a new scandal breaks.It is a sign of how powerful the financial sector is that there is not a credible alternative vision for financial reform being talked about by the politicians.
Your humble blogger has been offering a credible alternative vision for financial reform as transparency has passed the test of time! Transparency was first implemented in the 1930s. Over the next 75 years, it was the foundation for confidence in and the smooth functioning of the financial system.
Yet, politicians are not talking about the need for transparency despite the fact that every place in the financial system that has encountered difficulties since the beginning of the financial crisis, you will find opacity (banks, structured finance, Libor interest rates,...).
Yet neither politicians or the mainstream media talk about the need for transparency.
It's always a variation of the following sequence: denials, apologies, hearings, sacrificial sackings or resignations – followed by calls for more sacrificial sackings. Every now and then a knighthood gets stripped, but that's it.
How bad does it have to get before politicians act?