Despite all the heated exchanges over UK Prime Minister David Cameron’s plan to renegotiate Britain’s membership of the EU, whether the UK stays in or leaves the EU may not be critical for the City. Far more important, says Tim Ambler, is the need to create a single global market for financial services. In such a global market, the potential for such a leading-edge financial services provider as London is unlimited.
The US Department of Justice's lawsuit against Standard and Poor's is misguided, says our legal writer Lawsmith. It was the market's confidence in the ratings agencies that was at fault, not the agencies themselves.
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The reforms to financial regulation that followed the 2008 crisis have been dead wrong, argues Deri Hughes. Interventionism and subsidies for established banks have choked competition and added even more layers of protection for established banks than existed before. The answer is to take the state out of the money and banking business.
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Inflation, says Peter Twigg, is the ultimate corruption: the trick used by politicians to conceal vast spending and wastefulness. It is nothing less than a full-scale robbery of the people by the state, and it's high time that more of us realized how pernicious it really is.
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Why the Financial Conduct Authority will not be fit for purpose and should be scrapped in favour of a strengthened consumer ombudsman.
Mikko Arevuo calls for a market-based alternative to bank regulation that puts executives on the line for bank failures by giving them a special class of share that makes them more liable for losses. By re-aligning incentives, other forms of bank regulation could be removed and a more stable financial system cultivated.
Tim Ambler and Eamonn Butler review the government's plans to reform financial regulation, and argue for a more streamlined approach that does not inhibit competition by smothering new market entrants with costly regulatory requirements.
Accurate accounting is at the root of the legal and scrutiny framework; without accurate accounts basic laws are incapable of enforcement. This report argues that international accounting rules have given the impression of illusory profits on bank balance sheets, inflating bonuses and creating perverse incentives for banks to act recklessly.
In this response to the Vickers report, financial experts Tim Ambler and Miles Saltiel argue that the report's findings fail to address the root causes of the financial crisis and would create another layer of bureaucracy. Instead, the government should allow the creation of new "Trust Banks" that would be safely run, reduce arguments for protection of riskier banks, and introduce new competition to the high street.
The Vickers Commission got it wrong, says Miles Saltiel. By focusing on linkages between retail and investment banks, it missed the real causes of the 2008 financial crisis and an opportunity to fix the problems in the financial sector. Rather than giving increased competition the lowest priority, as the Commission has, increasing competition in the banking sector should be the main goal in the government's banking policy.
The Adam Smith Institute is the UK’s leading libertarian think tank...
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