OpinionMar 22 2013

No brighter than you and me

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I mean why would it? It has no market function. It is a bureaucracy, with all the rules and limitations that are necessary to govern the behaviour and powers of all satraps everywhere.

And it is staffed by blokes no smarter than you or me, so why would it be imbued with any special powers of second sight not available to the rest of us?

Quite why anyone is surprised by its ongoing failure is a mystery to me. It seems to assume that just by collecting data and being able to measure things imbues it with understanding. It does not. More worryingly is the nature of the Libor calculations which seem to be based on what bank A thinks other banks would charge it to borrow money. This seems backwards to me. Surely the consensus rate for Libor should come from what other banks think they will charge bank A to lend it money?

A good start on reforming this mess would be to implement Douglas Carswell MP’s reforms (see http://www.youtube.com/watch?v=HMGr-OuXihg). Implementing these would do for the state sanctioned irresponsible private mints masquerading as banks and make much of the FSA’s – or whoever is regulating them this week – banking supervisions redundant.