- Andrew Sheng: The narrative of failure and the failure of narrative
- Financial crisis is basically a story of failure, but the failure is due to lack of understanding of how to prevent or solve the crisis. Hence, it is also the failure of narrative, or how to tell the story to each other so that people communicate and understand what to do.
- The more the world is interdependent, the more important that the East and the West should seek to understand each other. In an age of instant solutions, the West is more likely to be fixated by simple solutions to complex issues.
- There are no simple answers to complex questions. This is the failure of narrative between major trading partners. We need to tell our stories to each other better if we want a more stable world.
- The last two Governors were chosen from within the Bank. Sir Meryvn was chief economist and his predecessor, Eddie George, appointed in 1993, was a Threadneedle Street insider. That would seem to put the leading internal candidate, the present deputy governor, Paul Tucker, in a strong position.
- Andy Haldane, presently in charge of financial stability and acknowledged as one of the brightest minds at the Bank, has also been mentioned. But this would be a considerable leap for a man of just 44. Some see him as a more natural candidate – at this stage in his career – for deputy governor.
- Other potential candidates: Lord Turner, Sir John Vickers, John Varley, Lord Green, Sir John Rose.
- MMFs: Fight over new rules
- ICI's CEO, Paul Schott Stevens, warned of a "regulatory hat trick" that could "harm investors, damage financing for businesses and state and local governments, and jeopardize a still-fragile economic recovery."
- MMFs are a linchpin of the economy. They hold $2.7 trillion and their investments represent more than one-third of the commercial paper market — the short-term IOUs that companies sell to meet cash-flow needs, such as payroll. They also invest in more than one-half of the short-term municipal debt on the market, which state and local governments rely on to finance roads and building projects.
- To ensure investors are at least earning marginal returns, (ave 0.02%) Federated and its rivals have been waiving investment fees and eating the costs of running money funds. Federated, for example, waived nearly $202 million last year.
- Whether Schapiro can get a required majority of the five-member commission to approve meaningful changes is in doubt, because some members have expressed reservations.
- It could be next year before any rules are finalized, even without litigation that he expects the industry to file.
- Five priorities:
- Economic stabilization and structural reforms as foundations for growth and employment;
- Strengthening the financial system and fostering financial inclusion to promote economic growth;
- Improving the international financial architecture in an interconnected world;
- Enhancing food security and addressing commodity price volatility, and
- Promoting sustainable development, green growth and the fight against climate change.
- Ministerial meeting: 4-5th Nov, Mexico City
- Aims at implementing uniform reporting requirements which are necessary to ensure fair conditions of competition between comparable groups of credit institutions and investment firms.
- Covers:
- (i) information needed to check institutions’ compliance with the large exposure regime as set out in Articles 376 – 392 of CRR (Capital Requirements Regulation).
- (ii) information on concentration risk which competent authorities need to analyse as per Article 79 of the Capital Requirements Directive (CRD).
- The scope and level of application are in line with the CRR, currently under discussion by the EU legislators.
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