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The Guardian: A Labour-made crisis

5 March 2009

By Dr Eamonn Butler, Director (March 05, 2009)

Published in The Guardian here

 

Sunday Times: We've all been made criminals

1 March 2009

By Dr Eamonn Butler, Director (March 01, 2009)

Published in The Sunday Times here

Business Standard: Global Financial Crisis IV - Geo-political consequences

24 February 2009

By Deepak Lal, Senior Fellow in Globalization (January 27, 2009)

Published in The Business Standard here

CNBC: Tom Clougherty discusses Gordon Brown

13 February 2009

Click here to watch Tom Clougherty discuss Gordon Brown.

Radio 4: Dr Eamonn Butler discusses emigration and the future state of the UK economy

9 February 2009

Click here (38:44) to listen to Dr Eamonn Butler discuss emigration and the future state of the UK economy on You and Yours.

Tom Clougherty discusses bankers' pay on Radio 2

5 February 2009

Click here (and fast forward to 1:08.40) to listen to Tom Clougherty discussing proposals to cap bankers' pay on Radio 2's Jeremy Vine Show.

Washington Post: China's Wen Blames Crisis on Lax Controls

3 February 2009

By Mary Jordan (3 February 2009)

Published in The Washington Post here

Chinese Premier Wen Jiabao, after a meeting here with British Prime Minister Gordon Brown on Monday, said that a lack of effective regulation had played a key role in unleashing the global financial crisis and its "disastrous consequences."

"Some financial institutions pursued profit in a blind way, without effective regulation," Wen said, adding that the crisis "shows how dangerous a totally unregulated market can be."

The Chinese premier's comments came two months before President Obama, Wen and other leaders of 20 of the world's largest economies meet in London to discuss a new system to monitor the global financial system.

Brown, who will host the meeting, has spearheaded calls for an international watchdog, saying, "You can't deal with the problems of global financial markets with national systems of regulation."

Regulation is an issue that arouses particularly strong feelings in London, which has grown into a leading financial center in recent years in part because of its reputation for light regulation.

Many in the City, as London's financial district is called, have cautioned against overloading banks, insurance companies and other financial institutions with new bureaucratic rules, saying it would strangle future growth.

But political leaders, citing the overwhelming public outcry over a crisis that has sent housing prices plummeting and unemployment skyrocketing, are pushing for greater government oversight over a financial industry that is widely seen as out of control.

Adair Turner, Britain's top financial regulator, said Monday that the "horrendous instability" in the markets because of the crisis has left "little appetite" for light regulation.

"People realize that the cost of having gotten the regulatory system wrong is hugely higher than if we had regulated more tightly in the first place," Turner, head of Britain's Financial Services Authority, said in an interview.

Turner has called for, among other things, requiring banks to build up substantial capital in good economic times that can be used in bad times. He has also called for stricter regulation of investment banks, hedge funds and other institutions in what he has called the "shadow" banking system.

But many say they are worried that the hedge funds, foreign banks and other financial institutions that moved to London in recent years -- as the city promoted itself as an easier and less bureaucratic place to do business than its rival New York -- will leave.

Eamonn Butler, director of the London-based Adam Smith Institute, said there is likely to be "overkill" when it comes to new regulation. That could "gum up financial markets," he said, and prove so costly that it drives all but the biggest players out, hurting competition.

"London benefited because it was lightly regulated," Butler said. Now, he said, "cities in the Far East are rubbing their hands" at the prospect of getting new business that relocates from London and New York as regulation tightens.

Brown, who has emerged as a global leader for his response to the economic crisis, continues to be hammered for it at home.

George Osborne, the opposition Conservative Party's chief spokesman on economic issues, blamed him for botching regulation during his decade as Britain's Chancellor of the Exchequer, or finance minister, before he took over as prime minister in 2007.

In a speech Monday, Osborne said that Britain's financial system had been "broken" by Brown, including his decision to remove regulatory functions from the Bank of England.

Lax regulation, Osborne said, allowed banks and other institutions to increase their debt to many times what they could afford. The government was forced to take over the ailing Northern Rock bank last year and now has a 70 percent stake in the Royal Bank of Scotland, which had been in danger of collapse.

In a news conference after his meeting with Wen, Brown again sought to trumpet Britain's response to the crisis. He said he intended to double British exports to China next year and warned of the dangers of countries turning inward during this crisis.

Even as he spoke Monday, hundreds of British power plant workers went on strike as part of a growing labor action to protest the use of foreign workers.

"Premier Wen and I agreed that the biggest danger the world faces is the retreat into protectionism, which is the road to ruin," Brown said. "The best attack on protectionism is to demonstrate today the benefits of trade for jobs, for businesses and for eventual prosperity."

Brown said the extension of trade between Britain and China "is a signal to the whole of the world that we will work together, cooperating, so that we can come through the world downturn."

Wen blamed ineffective market regulation, excessive borrowing and overspending in the West for the global downturn. He also said that as leaders focus on reshaping the world financial system, more priority should be given to helping poorer nations.

"There is light at the end of the tunnel," Wen said. "I am calling for confidence, cooperation and responsibility. This financial crisis is a global one. No single country can remain immune. We are sitting in the same boat, and we need to all work together to overcome the difficulties."

Not everyone welcomed Wen's thoughts. At an appearance at Cambridge University, a protester threw a shoe at the Chinese leader, exactly the same treatment then-President George W. Bush received at a recent appearance in Iraq.

Business Standard: Global Financial Crisis III - What remedy?

27 January 2009

By Deepak Lal, Senior Fellow in Globalization (January 27, 2009)

Published in The Business Standard here

France 24: Davos forum to focus on 'shaping the post-crisis world'

26 January 2009

By Euny Hong,  Alexandra Renard and James Andre (26 January 2009)

Published in the France 24 here

This year's edition of the oft-criticised World Economic Forum, held between Jan. 28 and Feb. 1, has a six-point agenda focusing on global financial stability. But experts told FRANCE 24 the real work is carried out behind the scenes.

With the global financial crisis dominating the headlines for the past few months, it comes as no surprise that the World Economic Forum, which opens Wednesday in the Swiss alpine village of Davos, will be devoted to finding ways to try to solve the crisis. This year, organisers of the event, which is usually replete with receptions and cocktails featuring business and political luminaries, must be mindful of the economic climate.

While the number of heads of state attending the conference this year is almost double that of last year, fewer business leaders are expected to participate in the five-day conference. Russian Prime Minister Vladimir Putin will open the meeting, which will be attended by Chinese Premier Wen Jiabao, German Chancellor Angela Merkel as well as British Prime Minister Gordon Brown among others. One notable absence is US President Barack Obama, who will be represented by senior White House aide, Valerie Jarrett.

With the conference opening just two days after the collapse of the Icelandic government following its perceived mishandling of the nation’s financial crisis, this year’s meeting looks set to focus on political leaders as the global economic crisis threatens to affect governments across the world.

Iceland is not on the agenda of the 40-year-old conference, whose overall theme is “Shaping the post-crisis world".

Speaking to FRANCE 24, Geoffrey Wood from the London-based Cass Business School said it would be a waste of a conference if Iceland were not on the agenda. “Iceland raises an interesting question", he said. “Who should be responsible for a bank when it fails? Had we been informed that when an Iceland bank defaulted, the only available resources would be Icelandic government tax reserves, people would have thought much more carefully about using an Icelandic bank. At the moment there is no clear statement about who is responsible for which bank."

Wood feels that only at an international level could another Iceland be prevented. “Most banks are international when they’re alive, but who looks after them after they’re dead?"

‘A salon of vanity’

Since it was set up in 1971, the World Economic Forum has attracted criticism from anti-globalisation activists as well as experts who question whether the gathering of business and political elites actually achieves its primary goal, which is encapsulated in its motto, "entrepreneurship in the global public interest".

While critics view Davos as a symbol of flamboyant capitalism, organizers this year hope the forum will be able to address the global economic crisis.  But Markus Kerber of the Berlin-based Technische Universität is sceptical about the summit's ability to address the crisis. "Davos is a salon of vanity, nothing more," he said. "Davos has never offered any solutions or new approaches. They don't question anything, especially not IMF politics, or the politics of world banks."

According to Eamon Butler, director of the Adam Smith Institute in London, the real work at Davos is done behind the scenes. “The [Davos] agenda is not so important. Most of the work is outside the conference hall, to keep it not reported, off the record", said Butler.

What’s more, according to Butler, different people attend the conference for different reasons. Politicians, suggested Butler, will go “to meet other politicians" to compare notes. But at Davos, politicians also try to make important contacts with business leaders, “because business people know more about what’s going on than political officials", said Butler.

This year, about 1,400 business executives are expected to be at Davos. Many of them might be spending their time at Davos justifying the need for financial bailouts to the politicians.

That said, says Butler, one must not expect too much. “It’s not like the UN Security Council. The Security Council decides things. The Davos conference doesn’t." In fact, Butler says Davos this year will be “business as usual", except that “there will be a lot of small countries irritated by big ones".

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