James Moore: London's regulators are as scary as a Disney movie with the lights turned on

Outlook: US regulators have been more alive to the situation. Even the FBI has got in on the act

W asn't financial regulation supposed to have turned over a new leaf? With phrases like "proactive", "intrusive" and "harsh" taking over from "light touch" and "risk based".

That is certainly what the Financial Services Authority would have us believe. Talking tough has been the name of the game in recent months. The FSA's outgoing boss, Hector Sants, even suggested that banks should feel "frightened" of the watchdog.

If events at JP Morgan are anything to go by, that fear is about the same as what you might expect to feel from watching a Walt Disney cartoon in the middle of the day with all the lights turned on. And a teddy bear at the ready.

Like most banks, JP Morgan has griped about the FSA's new regulatory landscape. But, then, banks are pre-programmed to complain vociferously about any increase in regulation, however small that increase might be. Turkeys don't vote for Christmas.

The question that needs to be asked is whether the FSA's talk resulted in any real action. The JPMorgan affair doesn't suggest an answer we should be comfortable with.

Why was it motivated to locate such an important operation as its chief investment office in London? Which, in the view of most US banks, is basically a mere branch office at the centre of the Europe, Middle East and Africa region. Even if it was under the (as it turns out less than) watchful eye of one of the bank's highest flyers, the now dethroned Queen of Wall Street Ina Drew, it seems a strange decision to make. London hardly presents lots of advantages when it comes to, say, tax.

One of the explanations for the decision might be because the regulations and the people enforcing them were less likely to result in awkward questions being asked in London than they might have done in New York.

It is worth noting that US and British regulators have known about JP Morgan's London trading losses for some time. But it certainly appears that US regulators have been more alive to the situation. Despite the fact that the snafu occurred on this side of the pond, things appear to be moving rapidly Stateside. Even the FBI has got in on the act. Here, a month after the regulators knew about the problem, they had still not ordered the bank to produce a blow-by-blow account of what went on through the commission of a section 166 report, which is usually done quite soon after problems have been identified.

It's true that banks will always make losses. But as more and more revelations have emerged about the operations of JP's chief investment office, it has become clear that this is not just the case of a simple trading loss. When the dust has settled, questions need to be asked about why the regulators on this side of the Atlantic have been so (apparently) slow to react.

The perils of tearing up employment rights

David Cameron is advised by a number of very clever people who have a habit (as very clever people often do) of saying rather stupid things. Adrian Beecroft, the venture capitalist and philanthropist, is the latest.

On Thursday, the Government is set to publish his recommendations for sweeping reforms to employment laws, which will involve tearing up a swath of employment rights.

The theory sounds enticing: make it easier to fire people and you also make it easier to hire people and thus encourage the economy to start going again.

The reality is rather more complex. For a start, just because the former is true, doesn't necessarily mean the latter is equally true. Faced with a troubled global economy, multinationals with operations in multiple countries will be delighted if one of them makes it easier to fire staff. And that's where they will turn when it comes to making redundancies. Will they necessarily rehire those people when things look more cheery? That is far from being guaranteed.

Second, Mr Beecroft appears to have forgotten that household consumption accounts for 48 per cent of Britain's GDP. This is already being hit by the fact that consumer confidence is seriously lacking. Inducing genuine fear in people who already feel insecure isn't going to help.

Mr Beecroft's ideas are cut from a similar cloth to those put forward by Steve Hilton, a previous Cameron adviser who thought it was a good idea to abandon virtually all consumer rights. But they will no doubt be lapped up by a restive and ideologically driven right wing. And who cares about practicalities when you've people like that to appease?

Hedge fund deal that doesn't make sense

Despite facing all sorts of difficulties with its flagship AHL fund, Man Group was on the acquisition trail again yesterday, buying rival FRM for a maximum of $82.8m in cash plus a share in future performance fees.

Given that the deal brings with it $8bn of assets under management, handy at a time when AHL has been shedding them at quite a rate, that amounts to about 1 per cent of them. Less than FRM actually charges its clients.

Now it's true that Man has an enviable distribution network, but unless it has put in place some blockbuster incentives (always a possibility) that really doesn't amount to very much. Which begs the question, why? The deal makes all sorts of sense from Man's perspective: if your own product isn't working and you're a big beast, go out and buy someone else's. It appears to make much less sense from FRM's, unless its product (a fund of hedge funds) is facing difficulties of its own.

Suggested Topics
News
people

Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
News
videoWatch Lynda Bellingham's tragic final Loose Women appearance
Arts and Entertainment
The last great picture - Winner 'Black and White' and overall 'Wildlife Photographer of the Year'
art
PROMOTED VIDEO
News
people

News
i100
Arts and Entertainment
High notes, flat performance: Jake Bugg
music

Review: Despite an uphill climb to see Jake Bugg in action, his performance is notably flat

News
The Putin automaton will go on sale next month in Germany
videoMusical Putin toy showing him annexing Crimea could sell for millions
News
news

Powerful images of strays taken moments before being put down

News
i100
Arts and Entertainment
S Club 7 pose for Children in Need 2001
music
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
'Right Here' singer Jess Glynne is nominated for Best Newcomer at the MOBO Awards 2014
musicExclusive: Jess Glynne hits out at 'ridiculous' criticism of white artists nominated for Mobo Awards
Voices
'Irritatingly Disneyfied': fashion vlogger Zoella
voices

Arts and Entertainment
Russell Brand has written a book of political analysis called Revolution
books

Review: Witty banalities aside, the comedian has an authentic voice

Arts and Entertainment
Separated at birth? Frank Sivero (left) claims The Simpsons based Mafia character Louie on his Goodfellas character
arts + entsFrank Sivero sues Simpsons studio over allegedly basing mobster character on Frank Carbone
News
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee
people

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London