Did Davey do the right thing?

[ahinton]

Yes but the difference would be that were government to run the financial sector rather than the private sector, policies would become "political", something the private sector has always tried to hoodwink the public that it and its activities are not, indeed have strongly argued that political regulation, the very thing hard lessons from the past 2 years have revealed as indispensable, stands in the way of responsiveness, efficiency and so on. How many of the firms operating from Canary Wharf are unionised? I rather doubt if any of them are. Of course the political right has always argued that private sector accountability lies with shareholders who are rarely informed in detail. Annual company reports don't delve far into the operational or decision-making minutiae, and if they did would probably be beyond comprehensibility to most would-be shareholding voters. Thus when it comes to shareholder say the couch potato mentality holds sway. Trade unions already established in the civil service would be in a position to argue a socially responsible role for a nationalised financial sector, and present their interests as being synonymous with those of the public, much as for example trade unions in public transport argue for defending jobs and conditions on grounds of safety. Unlike company AGMs, where the only decision shareholders have apparent resort to in the case of mismanagement is chucking out an entire board of directors, trade unions leaders stand on political platforms and are subject to election. There may indeed be no evidence that an arm of government funded by the taxpayer instead of a private company would have led to the current situation being any different, let alone any better - one rather obvious reason being that it has never been tried under a system with democratic accountability inscribed nominally into its ethos.S-A

I have no idea about the extent of unionisation at Canary Wharf, but I still don't see how this can be a contributory influence over what can be done well and what badly there. I gave the example of FSA which is not only a company limited by guarantee (although in other respects operates as though it were an arm of government in that it can fine micreants but is not permitted to make a profit, has no money of its own and has no shareholders to whom to be accountable), it is supposedly accountable to Parliament but, in practical tems, is not so other than when it so chooses; it is nominally responsible for its actions and inactions under the Statutory Code of Practice for Regulators (which likewise governs other UK industry regulators), but a recent FOI enquiry generated a response from HM Treasury that actually admitted that neither it nor any other organisation is empowered to oversee, let alone ensure, FSA's compliance with that code of practice and, it is also worth remembering, FSA itself as well as its directors, employees and agents are granted statutory immunity from prosecution in the Financial Services and Markets Act 2000 in all cases other than breaches of the HUman Rights Act and Acts of bad faith - in other words, they cannot be sued. What chance is there, under such circumstances, of FSA being held duly accountable for its misdemeanours and regulatory failuers including those to which it has now publicly admitted in a report on the banking crisis? FSA has also ceased its Profressional Indemnity insurance cover more than seven years ago, since which time it has no longer been able to go to an insurer to claim funds to cover the costs of any inconvenience or losses that it might incur; not only that, the financial services industry that it regulates and which pays for its very existence was not even asked about ditching this policy.

The point that I'm making here is that the fact that it doesn't matter whether organisations are privately or publcly run or function in the in-between manner of FSA (i.e. as a quango), there's no guarantee of things going right or of due redress if and when they don't.

[Lateralthinking1]

FSA staff jump ship as city regulator nears split: http://www.independent.co.uk/news/bu...t-2361055.html

Surely what is important about the relationship between Government and the private sector is making sure there is adequate regulation that is somehow accountable to the electorate. Whether in the case of the financial sector this is done by HMT directly or quango - a non-profit company, yeah right - matters rather less than transparency. We need to see how useless it is.

Nationalised utilities are important though because placing our fundamentals in the private sector is the same as selling off Cheshire to McDonalds. If burgers become unpopular and the company goes down the drain, a chunk of the country becomes dysfunctional.

OK, some of it goes to Wimpy and KFC. It isn't competition. All the prices are the same or else they rotate. We were given a dud theory there and I always knew it. What is the seller's equivalent to caveat emptor? Not that we the public had any big say in it.

Then, of course, there is Europe. Virtually all of our light and heating and cooking and water and travel are now in the hands of companies with a big state investment, be that France or Spain or the outer reaches of the Basque Country. So if we want to leave the EU they will simply pull the plug. Will the 100% of people who can't leave the country please now light a candle.

[ahinton]

Surely what is important about the relationship between Government and the private sector is making sure there is adequate regulation that is somehow accountable to the electorate. Whether in the case of the financial sector this is done by HMT directly or a quango matters less than transparency. We need to see how useless it is.

Sure - but when we do so (subject to the extent to which we can rely on information provided in the course of so doing), what do or can we do about it when the organisation concerned is not in practice subjected to the provisions of the Statutory Code of Practice for Regulators, chooses whether, when and to what extent it is accountable to Parliament and cannot be sude except in extreme and particular cases? Yes, FSA is being split into two at the end of next year, but there are no indications, let alone guarantees, that the above factors will not continue to pertain thereafter. Sorry to plug this particular case, but I do think that it points up the matter of accountability or otherwise, be it to Parliament, the electorate, a supervisory organisation, the shareholders or the man in the moon.

[teamsaint]

I don't know how the banks could do more damage if they were nationalised. But I suppose it's possible.

Anyway, lets give it a go and see..........its worth the gamble !!

[ahinton]

I don't know how the banks could do more damage if they were nationalised. But I suppose it's possible.

Anyway, lets give it a go and see..........its worth the gamble !!

But we have already given it a go, very recently and, given the still parlous state of RBS's books, it doesn't seem to me to have been worth the kind of "gamble" with taxpayers' money that I'd feel too pround of, frankly!

Ultimately, though, whether or not banks or other businesses are run by governments, they're always run by people - the people in charge of them - and if they're successful, fine, but when they get into the mess that some of them have done (and would doubtless would have done had they been in state hands at the time), they can wreak untold havoc.

[teamsaint]

But we have already given it a go, very recently and, given the still parlous state of RBS's books, it doesn't seem to me to have been worth the kind of "gamble" with taxpayers' money that I'd feel too pround of, frankly!

Ultimately, though, whether or not banks or other businesses are run by governments, they're always run by people - the people in charge of them - and if they're successful, fine, but when they get into the mess that some of them have done (and would doubtless would have done had they been in state hands at the time), they can wreak untold havoc.

You are right about people running things. Nationalisation is not a wonder cure. But the banks and their friends in the ratings agencies have brought us to the edge of calamity.
I am talking a bit tongue in cheek, but seriously, the banks/agencies are playing chicken with the fates of hundreds of millions of people, and that is reason enough to attempt to take them in hand.
The absolutely pathetic way that RBS has been handled is a failure of weak (or pliable) politicians, not of the idea of some form of wider , more democratic control.

[Lateralthinking1]

TS - I am not saying no to nationalizing banks and I am not saying yes. I just accept that it won't happen except when it happens. It appears that it does happen, kind of, but only when people who are paid bucketfuls for risk management leave under dark clouds of failure with astronomical bonuses. I do like your suggestion though of a random selection of MPs.

AH - It is a bit rich, no pun intended, to say that state management of banks doesn't work on the basis of a few months in 2011. RBS was chartered in 1727 so let's just see what happens in the next 300 years. Of course you will also appreciate that if you ask me to look after your money, I then ask you how much you have, and you consequently tell me that you are not sure but it is definitely some sort of a minus figure, this is most unlikely to bring out the brilliance I never knew I had.

I cannot say that I am very keen on the FSA, or its successor, or any Ombudsman, or any Commissioner. I have had a fair bit of experience with regulators. They are like teflon and they know it. The staff, if not their ever distant management, are always apologizing forlornly for their lack of bite. But the theory is that we should vote in a party to Government that will change the machinery for the better. I accept that this is naive but there is no alternative.

(By the way, if you do have a pot of gold, and an issue with the financial regulator, how about a judicial review? You should also ideally have a mate in high places - either a Minister or even better Mr Justice Impartiality who is by all accounts excellent.)

[ahinton]

You are right about people running things. Nationalisation is not a wonder cure. But the banks and their friends in the ratings agencies have brought us to the edge of calamity.
I am talking a bit tongue in cheek, but seriously, the banks/agencies are playing chicken with the fates of hundreds of millions of people, and that is reason enough to attempt to take them in hand.
The absolutely pathetic way that RBS has been handled is a failure of weak (or pliable) politicians, not of the idea of some form of wider , more democratic control.

OK, so, since I broadly agree with you on this, what would be your answer? I'm not pointing an accusing finger at you, even if you don't have any such answer, but I'm merely curious...

[ahinton]

AH - It is a bit rich, no pun intended, to say that state management of banks doesn't work on the basis of a few months in 2011.

I didn't say that it wouldn't work; I merely observed that there's no evidence that it would work any better than anyone else managing them.

RBS was chartered in 1727 so let's just see what happens in the next 300 years.

Sure, but the climate now is quite different. They've taken over NatWest, Coutts and heaven knows who else and their demise was largely fuelled by their taking over ABN Amro. I don;t think that we'll have to wait more than another 300 months before we find out what happens!

Of course you will also appreciate that if you ask me to look after your money, I then ask you how much you have, and you consequently tell me that you are not sure but it is definitely some sort of a minus figure, this is most unlikely to bring out the brilliance I never knew I had.

Don't worry about that; I wasn't about to do so!

I cannot say that I am very keen on the FSA, or its successor, or any Ombudsman, or any Commissioner. I have had a fair bit of experience with regulators. They are like teflon and they know it. The staff, if not their ever distant management, are always apologizing forlornly for their lack of bite. But the theory is that we should vote in a party to Government that will change the machinery for the better. I accept that this is naive but there is no alternative.

(By the way, if you do have a pot of gold, and an issue with the financial regulator, how about a judicial review? You should also ideally have a mate in high places - either a Minister or even better Mr Justice Impartiality who is by all accounts excellent.)

Much depends on what the issue with the regulator may be. FSA is not immune to judicial review but one would first have to conduct such a review successfully in order specifically to remove their statutory immunity from prosecution and then use that new found freedom to sue them for whatever it might be; since they have access to almost unlimited funds from their authorised and regulated entities, they'd be able to appeal such a review to the last and, even if they ultimately lost, the industry would have to fork out a fortune to pay for the costs and then the aggrieved part would be able to instigate legal action against FSA which, if ultimately successful (again probably only after the appeals procedure had been taken to its limits), the industry would once again be called upon to fund the consequences. Taken to the extremes of logical conclusion, this kind of thing could possibly end up risking the total paralysis of the financial services industry.

[Lateralthinking1]

I hope to reply. I'm wading through the formal written statements from Piers Stefan Pughe-Morgan to the Levenson Inquiry. I am impressed by the number of times someone can write "no recollection".

[ahinton]

I hope to reply. I'm wading through the formal written statements from Piers Stefan Pughe-Morgan to the Levenson Inquiry. I am impressed by the number of times someone can write "no recollection".

The Texan financial magnate Mr Stanford evidently doesn't even have to do that, as he's getting his medical team to do it for him...

[Serial_Apologist]

I hope to reply. I'm wading through the formal written statements from Piers Stefan Pughe-Morgan to the Levenson Inquiry. I am impressed by the number of times someone can write "no recollection".

Pughe - is that spelt right?

[Lateralthinking1]

Yep. Sure is. Allegedly no relation to the guy in Trumpton. Surname O'Meara until the age of 1.

Stanford is the new Ernest Saunders. He supposedly has a brain injury because someone hit him but no one can say what it is exactly. If you know someone who has had a brain injury as I did - unconscious for days after a motorbike accident and then several months of slow rehabilitation - you know what a brain injury is.

Then he has had addictions to drugs addressing anxiety and depression. That could be because the authorities didn't stick him on ones with minimal addictive properties and gave him three times the recommended dose for many months. Either insider friends of his or fools.

[Chris Newman]

I could not resist the picture of Davey in today's newspaper (Well, Simon and Mr Pee's favourite newspaper)

http://www.guardian.co.uk/theguardian/shortcuts/2011/dec/21/caption-competition-david-cameron-afghanistan

[aka Calum Da Jazbo]

eurozone in a nutshell ...or two ...