Friday, Jul 10, 2009
Tossa
Telegraph: EU's regulation of City would 'strangle' London, says Mayor Johnson
Boris Johnson, the Mayor of London, said yesterday that European plans to regulate the financial services sector threatened to drive hedge funds out of London and Europe, even though they were "blameless" for the crisis.
Posted by devo @ 12:06 AM (1245 views) Add Comment
18 Comments
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1. devo said...
Anyone for Wiff Waff?
2. devo said...
When the City's finally empty, it will be useful for 'parts'.
Plenty of good stone blocks. Built to last.
3. quiet guy said...
"hedge funds contributed about £3bn in tax a year"
Is that all? If that's all they contribute, do they really matter all that much in comparison with other problems we face?
4. Potnoddle said...
Go Boris; some sensible views this was a Brown ballsup; and had zero to do with hedge funds.
5. Bear said...
He is absolutely right. Its the big banks, and, most importantly, the central bank that is responsible. We need to regulate/end the central bank and end regulate/end fractional reserve banking. If we regulate the financial sector, we'll destroy the economy. A lot of the current regulations cause problems, e.g. ratings agencies cause money to flow into AAA assets that should be BBB, but that never happened before rating because people used to actually analyse financial products rather than just respond to a certificate.
6. d'oh said...
3 billion is all they contribute in tax?! How much has this bailout cost?
7. happy mondays said...
@ 3 do they really matter all that much in comparison with other problems we face? What problems ? Apparently the market is stabalizing and we should be back to NORMAL soon ! "Move on please, nothing to see here" We shall be back on our feet and ready to go by Jan 2010...
8. the number cruncher said...
And who massivly funded Boris's campaign?
Boris beat Ken because of the huge amount of campaign fiunds he got from a very dodgy cabal of propety developers and hedge fund managers.
Boris is paid for by the very people who caused the mess we are in and now he desperatly trying to defend them.
9. mark said...
thats if swine flu doesn't do the job first.........
10. Bones said...
3 billion in yer per tax is equivalent to 2p on income tax... not to mention the input to the economy of the people they employ and the resources they consume
11. Hammered said...
It's gonna be like a scene from 28 days later, but for real.
12. icarus said...
Blameless? Hedge funds were part and parcel of investment bank operations. Hedge Funds, private equity groups, SIVs and conduits were created by the banks, which loaned them the money to trade. The lending ('prime brokerage') was a big earner for the banks. The banks' traditional brokerage and fund management activities then provided these trading arms with vast amounts of lucrative, privileged real-time information. The trading arms of course then engaged in speculative arbitrage and asset bubble blowing.
Bank-generated hedge funds (and the other vehicles mentioned) were a vital part of shadow banking, the unregulated bit of investment banking. They were/are trader banks free from regulatory control or transparency in their speculative arbitrage and were one of the mechanisms used to expand banks' balance sheets and leverage, e.g. assets hedge funds used for collateral for loans from prime brokers (arms of the banks) were 're-hypothecated' (re-used) to back loans to the prime brokers themselves, thus greatly expanding the prime brokers' leverage.
http://www.ft.com/cms/s/0/4104413c-8a9c-11dd-a76a-0000779fd18c.html
Much of this applied to US investment banks but a substantial part of this shadow banking activity took place in their London satellites, where Brown's deregulation turned London into a kind of financial Guantanamo.
13. mander said...
3 billion only? William Hill is worth more than that. Other type of betting anyway.
14. charlie brooker said...
Dave Spart recently made a very valid point.
If other industries are 'stifled' by having to test the safety of their products, why not banks?
Given the important position banks occupy in the economy more than any other sector they have an obligation to ensure that their instruments are tested and certified as being safe (ie that they cannot be abused).
To see what I mean look at this: http://online.wsj.com/article/SB124468148614104619.html
15. charlie brooker said...
Dave Spart recently made a very valid point.
If other industries are 'stifled' by having to test the safety of their products, why not banks?
Given the important position banks occupy in the economy more than any other sector they have an obligation to ensure that their instruments are tested and certified as being safe (ie that they cannot be abused).
To see what I mean look at this: http://online.wsj.com/article/SB124468148614104619.html
16. hpwatcher said...
Some things need to be strangled....
17. doomwatch said...
London is finished.
18. 51ck-6-51x said...
£3b across 35k employees is pretty damn high ( £86k per employee )- not many industries can compete with tax take on that front, only other nasties like Big Oil & Pharmaceuticals maybe!.