My word, now there\’s a surprise!

Lord Turner said that although the \”extreme narrow banking proposal is clearly doable in practical terms…. I believe [it] could produce a financial system even more vulnerable to instability than the one we have today.\” He added: \”Such a division would clearly not be a policy response sufficient in itself.\”

Speaking at a FSA conference on regulatory reform in London, Lord Turner said that reducing the risk in the banks would be \”best pursued through the capital requirements we place on trading activities rather than through an attempt to write a law prohibiting some activities and allowing others.\”

He argued that it is vital to impose tougher capital rules for the banks, even with a higher level of supervision and scrutiny. \”Our ability to see bumps in the road ahead is imperfect so we need more shock absorbers,\” he said.

What a shocker! Head of regulatory bureaucracy argues that regulatory bureaucracy should have more power, more staff and more money even if the problem is solved by other means.

Calling Mr. C. Northcote Parkinson, could you come to the clue phone please? The citizenry need to be reminded of the eternal verities.

2 comments on “My word, now there\’s a surprise!

  1. an alternative interpretation is “man who knows what he’s talking about says narrow banking is not the answer”

    These look like strong arguments to me.

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