Alistair Darling, the Chancellor of the Exchequer, will deliver his long-awaited White Paper on financial regulation in Parliament at 12:30pm.
So, who thinks they\’ll be a complete cock up and who thinks they might just contain the odd thing of value?
For example, somewhere between the EU, the US and Darling himself (it\’s difficult to work out precisely where this started) there is the idea that all banks should continue to hold 5% of whatever securitisations they hold.
This is meant to make sure that they carefully consider the long term viability of that securitisation and thus don\’t create dogs like the toxic waste of the past few years.
That would be the toxic waste (the AAA tranches of those CDOs) which the banks did create and did hold because they thought they were safe. Those taxic wastes which are what bankrupted those who held them.
So the insistence is going to be that banks must do what has just busted the banks in order that the banks might not go bust.
It has to be said that there appears to be a slight error of logic in this idea.
For, if the banks had not held onto those AAA tranches, those tranches which they really did think were safe, if they had sold them on to insurance and pension fund, then the banking system would not have crashed. And if they had tried to but the investors were not buying them then the securitisation dance would have come to an end.
If you really wanted to make sure that the same mistakes were not made agai you would ban banks from holding any portion at all of their own securitisations. And what are the politicians recommending? The opposite.
Lucky for us, eh?