G20 Decides to Pursue Tougher Capital Standards 4 comments
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The statement from the G20 Finance Ministers meeting in London would appear to constitute a win for Tim Geithner and Alistair Darling. I use the word appears because it is always wise not to take these sorts of pronouncements at anything more than face value.
At any rate, the statement seems to indicate that the consensus was significant tightening of bank capital standards would be the thrust of future efforts. Treasury Secretary Geithner had pushed for this approach several days ago when he issued his guidelines for reform (link here) and he appears to have carried the day.
The French and Germans had come to the meeting with curbing bank pay and bonuses as uppermost in their minds. Recall that the French had already come down hard on their own banks and the Germans seemed inclined to follow their lead. The British were loath to jump on that bandwagon as they are desperate to save as much of the City’s financial industry as possible and viewed onerous compensation regulations as probably the last nail in the coffin.
Bonuses didn’t cause this crisis, they just made it seem all the more unseemly. By attacking overly lax capital standards, the finance ministers are on the right track. The key question is can they carry through and truly impose meaningful standards that can’t be gamed or will they cave to the power and pressure of the finance industry. It’s not an easy task.
More here.
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In regards to the French and Germans....
A fight against short term and risk taking compensation was a strong and justified theme. However, I felt it questioned the role of politicians. Is it to take objective action formed by public viewpoints (which may be prejudice), or is it to work towards what they personally think to be the best formulated result using their extended knowledge and resources? With upcoming elections, I think the latter has been ruled out.
This is about the worst possible decision they could have made. What in the name of Jesus are these as@holes thinking? It's the worst news that struggling economies of the world could ever want to hear. This is contractionary as hell. If they follow this policy, they'll in essence be further tightening credit which means loaning even less funds to businesses who are already starved for capital and desperately need funding. The natural result of this fiasco will be a further reduction in corporate and consumer spending and and a whole new rash of lost jobs. Expect unemployment to go through the roof now... worldwide. I mean, if you thought unemployment numbers were scary in the USA, it just gettin' started my friends.
There's no need for such an assbackward decision as this. They've got it 180 degrees wrong. And we all know who's really behind it... Geithner's puppet masters. These bastards all need to be put behind bars at the earliest possible opportunity... before they kill us all. God knows how many millions of people on this planet had their death warrants signed this weekend because of this decision. It'll take the form of starvation... and that's just going to be one of the myriad of horrors caused by this insanity.
The bankers caused this global catastrophe with full knowledge of what they were doing. And all just to line their own pockets. And now they're going to make it 10 times worse to line line 'em again, and they don't give a damn how many innocents get crushed in the process.