Subscribe to this blog's feedNews out from the FSA on how it plans to tighten up its liquidity requirements. As I noted in the writeup for Risk News, it's a bit cheeky of them to point out that "when a group gets into difficulty, liquidity which was believed to be available to the whole group can be ‘hoarded' by the parent or, in some cases, seized by local authorities intervening to protect their own depositors" ... without remarking that the biggest recent case of this involved the British government seizing assets of an Icelandic bank under anti-terrorism laws.
In times of dire extremity, the Russians say, man remembers his God: kak trevoga, tak do Bogu. And there's always been a link, historically speaking, between great upheavals and religious sentiment.
Here's the latest example - Greycourt, an asset manager for very rich people, publishes a white paper that contains the sort of thing Savonarola might have written if he'd got an MBA.
Examples:
We think it likely that there is a special circle in hell reserved for subprime lending banks
like Countrywide Financial, which were at the epicenter of the subprime collapse, and at
the epicenter of the ethical collapse...
Several, actually; in Dante's Inferno, just as in the US, there seem to be a lot of overlapping regulatory jurisdictions, and it's difficult to know whether they would count as Fraudulent Counsellors (eighth circle, immersed in flame), Counterfeiters of Currency (afflicted with disease), Corrupters of Politics (boiling pitch) or Usurers (rain of burning arrows).
Solution - it's all about the conflicts of interest, the author concludes. Though he admits that fixing those will be "a modest proposal"...
