More background on what seems to be going on behind the scene.
arthur From: James Russell Sent: Wednesday, September 28, 2011 10:22 AM To: 'James Russell' Subject: How far from Sarajevo to Basel? Its the obscure events in those odd little European cities that turn out to tip the world on its axis... At least, thats what a spate of stories in the business pages got me thinking this week. Theres a meeting coming up in Basel (Novemberish) where some sort of communiqué will reveal how much or how little banks may be reined in in future. The fight about the substance is going on now. Depending on how it turns out, the guys who ... oopsed ... us into a continuing world financial crisis that threatens the survival of governments and nations will either have to be a bit less reckless or they will be free in the good old American way to oops us towards further calamities (and themselves towards even more fantastic wealth). Canada is at the forefront in the fight for good, oddly enough. The CEO of the biggest glutton bank left on the floor (JPMorgan Chase) is trying to punch out the Bank of Canadas Mark Carney and push a line to the U.S.s spooked and ideological political class that any reining in is un-American. If the reining in cant be stopped, the U.S. should opt out of the system. Pretty heavy weight bullying. Im starting to re-read Churchills history of the second world war again, just now, and the early pages are full of how the U.S. got everyone to join the League of Nations in order that war should come no more ... then refused to join, making the whole effort utterly ineffective. Not a happy thought. [Its hard to make regulating banks sound more exciting than watching paint dry, but it really does matter more.] For a detailed look at the fight, the players, and whats at issue, heres a start in a report from yesterdays Globe and Mail: http://www.theglobeandmail.com/report-on-business/bankers-regulators-square- off-amid-turmoil/article2179981/singlepage/#articlecontent Also, below, a short letter in todays Globe commenting in a similar vein from someone who knows better than I do what hes talking about. http://www.theglobeandmail.com/news/opinions/sept-28-letters-to-the-editor/a rticle2182466/ Banking on Carney I wish to express my firm support for Bank of Canada Governor Mark Carney's financial regulation speech in Washington (Banks, Regulators Square Off Amid Turmoil Report on Business, Sept. 27). Despite the reported criticism of Mr. Carney's remarks by JPMorgan Chase CEO Jamie Dimon, the fact remains we would not be in the current situation were it not for the excessive overleverage and flagrant misappropriation of capital undertaken by the world's largest banking corporations. It has been our view that the world's largest banks are operating with leverage ratios of more than 20 to 1. We are now in an environment where all financial assets, including currencies, can change 5 per cent to 10 per cent in a single week (many change by that percentage in a single day). With volatility of that magnitude, the practice of maintaining such leverage is irresponsible. All banks should make stronger efforts to bolster their capital reserves. It should not be the responsibility of government to rescue these corporations if they continue to make the same mistakes. We must also question why banks were allowed to reinstate their dividends so quickly after the 2008 crisis. The current economic crisis is still, at its heart, a banking crisis. Mr. Dimon's reported criticism reflects his inability to acknowledge this. Eric Sprott, CEO, Sprott Asset Management LP, Toronto
_______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
