Comment, analysis and other offerings from Tuesday’s FT,
A seven-point banking plan
Anthony Bolton, president, investments, of Fidelity International, writes: The past 12 months has been a near-death experience for the global financial system. If governments had not acted as quickly and aggressively as they did we might now be in a global depression. Although we can’t stop such financial crises recurring, we may be able to ensure that they occur less frequently and that they have a less universal impact than the crisis we have just lived through.
To avoid crises, we need more transparency
Lloyd Blankfein, chief executive of Goldman Sachs, writes: One lesson from the crisis is the need for more effective systemic regulation. There has been a focus on who should exercise this responsibility. But the most critical question is what the systemic regulator should do, and what responsibilities will make it effective – not who, so much as how?
Guard of the fortress
After more than two decades marked by controversy, drama and, of late, triumph, Jamie Dimon sits atop Wall Street. Fêted by investors, respected by politicians and generally well-liked within his company, Mr Dimon – a mercurial figure capable of inspiring gushing awe among supporters and bitter enmity from competitors – faces a novel task.
Rewriting the alphabet soup
Financial innovation played a key role in the crisis that led to the near collapse of the global banking system last year. The alphabet soup of CDOs, CPDOs, CDS, ABS, ABCDS, ABCP and RMBS that were so popular during the boom years became the poison that infected the entire financial system. These markets are only now beginning to thaw.
Defaults ‘landmine’ awaits
A consensus is building that the worst is over for global corporate defaults. The cycle is proving less apocalyptic than had been feared during the dark days of last winter when credit was largely unavailable to all but the top companies.
Michael Skapinker: Leaders’ spouses make the best truth-tellers
At a recent lunch the Financial Times hosted for management consultants, one of them introduced us to the “spouse test”. Before you submit a proposal to a potential client, the consultant said, ask your spouse to read it. If he or she can’t make sense of it, rewrite it.
Editorial Comment: Gordon Brown’s car-boot sale
Another day, another fiscal canard. This time, Gordon Brown re-announced his intention to sell £16bn of public assets — a decision first unveiled at the Budget in April — and the process has been repackaged as part of Labour’s plan for fiscal retrenchment. Items ranging from the Channel tunnel through to the Tote, a state-owned bookmaker, will be offered for sale, ostensibly to help balance the books. But this is nonsense.
Lex on Barclays
The balance sheet detox continues. Barclays is planning to purge a further £4bn of credit risks from its balance sheet to allay lingering investor concerns. The fear is that it still harbours toxic assets and further writedowns loom, even after last month’s sale of a $12.3bn portfolio of assets to Protium Finance, a fund created by former Barclays mortgage traders.
Short View: Jobless recovery
What would send markets for a loop? Disconcertingly, it is possibly the event which the world’s populations, and its politicians, have been awaiting – a strong and early recovery in employment.
Video: Martin Wolf on the Nobel Prize for Economics
Two economists who specialise in understanding behaviour and transactions which are not covered by detailed contracts or law shared the 2009 Nobel Prize for economics.
Letters
Nobel committee has lost its moral footing
Asian economists deserve recognition for their successes