Us and UK regulatory bodies are also responsible for the financial crisis

Everyone knows that many banks in the field of financial and other institutions of serious mismanagement, to the global economy caused great damage. This situation is clearly a need to change. Ironically, when regulators, Governments and central bankers goes on and attacked the bankers are bureaucracies, their own mistakes, but also the same accusations.

United States Government is the real estate bubble in the instigator, and regulators failed to prevent the formation of foam. For too long, interest rates remain at low levels, causing excessive global loan. Practitioners from this inspired, and eventually resulted in the subprime mortgage crisis.

United Kingdom Financial Services Authority (FSA), Turner (Lord Turner) claims that the size of the United Kingdom's financial industry has been "out-of-scope of and rational society, certain innovation activities" and "socially useless", said Decree. While the Government of Germany on the automobile industry, or Government of France on their wine-making industry, are less likely to say. Automobile industry and wine-making industry is the major foreign exchange industry, has some harmful side effects. Regardless of its size, as regulators and should normally be nurtured in these sectors.

Turner heuristically propose a transaction tax, saying that this will reduce profits and limit social unacceptable bonuses, this is a weird way of reasoning.

We are already on stock transactions of this type of tax (duty), it increases the cost of capital, thus reducing the configured productivity, turnover and profit level; but no one believes that this approach reduces the bonus level. In any case, as long as the business is not entirely driven by overseas, this tax must be transnational; so far, we have been wisely to avoid international tax mechanism constraints — only a few minor exceptions, such as the VAT within the EU.

However, the ability to raise capital adequacy requirements, is a highly effective means of investigation. But it is not a panacea. People should not forget that 30 years ago, the securitisation process begins.

Requiring banks to preserve capital in order to not endanger the depositor confidence to compensate for loss of costly. This will increase the cost of doing business, but it is necessary to maintain confidence; with this in mind, depositors and borrowers have to pay for this. If the funding of the depositor to transfer funds directly to the need of money, thus eliminating the cost, both sides will benefit.

Modern data processing and communication methods that enable the large-scale implementation of this practice. Banks can be a convenient way to many investors in the offering of securities. If you are responsible for the action, you can avoid costly banking intermediation costs.

It is precisely because of the development of asset securitization, so that the glass-Stegall Act (Glass-Steagall Act) seem a bit redundant, but the Investment Bank is more powerful. Although apparently there was some unexpected events and scandals — especially in the junk bond market, but for the transactions and the prosperous net effect is generally good. We do not interfere with this success, it is very important.

In Frankfurt and Paris, you might hear on asset securitization General attacks, but this must be resolutely resist. Governments are currently strongly to take measures to avoid a repetition of the disaster, and this is understandable, but must accurately remedial measures. Fortunately, in charge of the United Kingdom financial services authority of people aware of this.

In fact, the core of the current disaster is a regulatory mistake: Basel international norms are not banking transactions books on highest level mortgage bonds imposed strict capital requirements. This is precisely what the massive accumulation of the toxic securities. Due to minimum capital support to hold these securities, the Bank considers that this approach does not have any problems, some banks have accumulated a huge amount of toxic securities. When the bank holding the securities eventually sold only in huge discounts, disaster this fall.

However, even if such a serious regulatory error, cannot exempt banks use this error profit responsibility (they used to think so).

And the rest of us, Turner also do not want to see the bankers ' pay is too high, but he did not put all the blame on encourages risky remuneration structure. However, these issues need to be resolved. In reality, there are large to fail, the taxpayer was a great potential risks. Perhaps you should request accreditation by the Bank to ensure that those millions of pounds to your bank or more debts (not allowing set-off) of management personnel (and their bosses), does not get over the past three years profit or profit-related bonuses.

Again, this is not a panacea, or in the absence of international agreement implementation; it helps to alleviate public concerns and can change public attitudes.