Davos, the Swiss ski resort that played host to the 2010 World Economic Forum, was not notable for any grand final communiqué and it drew to a close with many ordinary citizens in developed and developing economies scarcely aware that it had happened.
The UK Stewardship Code was launched by the Financial Reporting Council (FRC) in July 2010 and seemed to promptly vanish, almost without a splash, into that great pool of worthy things that one should do if one ever got around to it. The code - dubbed “the other half of the hinge” by FRC Chairman Baroness Hogg, since it is meant to complement the corporate governance code aimed at corporate board - was widely approved and widely dismissed, though not in public.
Project Merlin, an agreement made between banks and government to make banking more transparent, was brought into question when UK Chancellor George Osborne raised the bank levy to £800m this year. Ian Fraser wrote in his blog on the subject, "Project Merlin seems to me to be meaningless and shallow PR drivel, a charade designed to give the impression the government is doing something to sort out the UK's dysfunctional banking sector - when in fact it is not doing very much at all."
What’s the difference between an underwriter and an undertaker? According to a recent article in The Economist (Vexed in the City), not that much. Both operate in arcane and little-discussed areas. And since buying underwriting services from an investment bank for a corporate fund-raising (sometimes known as a equity “rights issue”) and organizing a funeral are both are “distress purchases”, suppliers can charge pretty much what they like.
As a counterweight to the view of the Great Depression expressed by the Chairman of the Federal Reserve, Ben Bernanke, I recently embarked on a reading of Murray Rothbard’s “America’s Great Depression”, Rothbard being a pupil of Ludwig von Mises, the key figure along with Friedrich Hayek, of the Austrian school.
French President Nicolas Sarkozy’s freehand sketch of a new capitalism for the 21st century astonished more than a few of the delegates at the 40th World Economic Forum held at the ski resort of Davos. What Sarkozy is against came through a good deal clearer than what he is for. He is against rampant “bad” capitalism as epitomised by the greed of global bankers, but then again, who isn’t these days?
Project Merlin, the wizard scheme dreamt up in autumn 2010 by the ex-Barclays chief executive John Varley and RBS chairman Sir Philip Hampton, in the hope of appeasing the government and drawing a line under “banker bashing”, has descended into farce.
I’m continually impressed and amazed by the speed of change in the technology of the investment markets. For example, last year was all talk about low latency and lit versus dark pools. This year, it’s all about private cloud-based services based upon co-location and proximity services. Next year, it will be all about real-time liquidity and settlement.
It seems that sovereign wealth funds are the latest “scary” thing in the media – perhaps scarier than high-frequency traders, Irish banks, Greek tax collectors or U.S. subprime borrowers. But there’s a difference: where the latter may blow up an economy, SWFs merely threaten to take it over, or at least its commanding heights (whatever those are these days).
Rallies continued all week in Cairo’s Tahrir Square, as protestors aimed to oust current Egyptian president Hosni Mubarak. Concerns over instability in the Middle East possibly affecting shipping in the Suez canal led to a surge in oil prices.