Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf : Reforming regulation
Bubbles and crises cannot be eliminated from capitalism. Yet it is hard to believe the risks run by institutions had nothing to do with incentives. The unpleasant truth is that incentives for risky behaviour are, if anything, even bigger than before the crisis.
Analysis: Madoff - a bitter dividend
Bernie Madoff’s confession last December rocked the world’s financial services industry – shaking investor confidence in the markets and in regulators alike, sparking widespread calls for reform, report Brooke Masters and Joanna Chung.
Turf wars undermine financial stability
An unseemly turf battle broke out last week over who should be in charge of spotting and squelching future threats to financial stability: the Bank of England or the Financial Services Authority, writes Julius, chairman of Chatham House and a former member of the Bank’s MPC. Neither the Bank nor the FSA covered itself with glory in the early stages of the current crisis. Both are secretive organisations with hierarchical decision-making. Such a culture works well for handling confidential information but does not foster open debate or the early recognition of external change.
John Authers’ Short View: Russian bear
Russia’s stocks appear to offer a perfect geared play on oil, and economic fundamentals confirm that it makes sense to treat them that way. If you think oil is going down, short Russian stocks; if you are confident about oil, buy them. So far, the return of the Russia bear is a symptom of this month’s falling oil price, nothing more.
Lex on markets
Those short of confidence need to be constantly reassured. It seems that equity and commodity markets since March have shared a similarly nervous disposition. How else to explain the strong reaction to such a mild fall in markets since last week? Yet, while investors are increasingly nervous, but they should never have been anything but.
Market Insight: Riding the commodity supercycle
With the sharp falls in commodities prices in the second half of 2008, investors are questioning the concept of the commodity super cycle and the rationale for investing in that asset class, writes Chris Watling, chief executive of Longview Economics. If history and long-term demand expectations are any guide, then several years of significant upside should be expected.
Obama must be bold on trade
President Barack Obama has let it be known that he is preparing an important speech on trade policy, writes Bergsten, director of the Peterson Institute for International Economics. It cannot come soon enough. China’s new protectionist policy on government procurement, while legal under the porous rules of the WTO, sharply raises the threat to the global trading system that he must counter.
Letters to the editor:
- Set Hester’s hurdles higher
- The army knows how to delegate
- Ease of internet banking will not attract more deposits
