Thoughtful, honest and making waves: A perfect Bank Governor
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Sunday 30 September 2012
In a speech that made the banking world sit up and take notice, Andy Haldane, the executive director for financial stability at the Bank of England, warned the Jackson Hole conference that the growing complexity of markets and banks can't be controlled with greater and more complex regulations.
Haldane went on to argue in a speech entitled "The Dog and the Frisbee", that regulators needed to bear in mind five limitations of the human mind. For example, he asked, if computers can't track all the different variables in a hideously inter-woven and inter-linked world, then how can humans?
More pertinently, these complex rules lead regulators and financial institutions alike to "manage to the rules", which means that they go right up to the line at which a crisis is triggered. Then of course they are too late to react.
This may sound obvious stuff. But actually it's dangerously provocative as it challenges the very fabric of the present financial system, one that is precariously trapped in its own complexity. As Haldane warned, "banks are the blackest of boxes".
It's a speech that resonated around the world and in the US earned him high praise, with some commentators claiming him as one of the world's smartest financial regulators. There's the chance to find out what Haldane is thinking now as he takes part in a debate "Socially Useful Banking?" – another hobby horse of his – being held by the Occupy Economics group on October 29.
Apropriately, the open-to-all, free debate takes place at the Friends House in Euston Road; it was the great Quaker families that set up Barclays and Lloyds and so will look back to the roots of banking.
Haldane is proving to be the most thoughtful, and thankfully, honest of regulators; one whom the authorities should listen to more carefully as they pile more and more regulations on banks, yet shirk fundamental reform.
As he also warned, the existing structure provides a subsidy to complexity. It's why this banking model is dead but no one wants to admit it. In my book, the odds on Haldane taking over as Governor are shooting up.
- 2 The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Baldness could soon be treated using stem cells, scientists hope
Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
Ball pool for adults opens in London
Amal Clooney gives excellent response to fashion question at European Court of Human Rights
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...