The chief executive of the City regulator has suggested that the pension funds crisis could not have been foreseen despite concerns about derivatives that schemes are exposed to.
Bureaucratic fuckwittery. Market observers were shouting that this could – could – be a problem at some point.
If the regulator couldn’t forsee that then we need a new regulator – or at least to fire the old one.
I mean who could have thought that borrowing money against an asset which has limited upside risk and massive downside risk could ever be a problem?????
It does seem curious that some pension fund trustees have tried to juice returns by betting on derivatives. How was it that the FCA and the trustees didn’t understand that the risks were not compatible with building long term value? Why haven’t the Brownian tax raids been overturned? Why does the FCA force these funds to invest in Gilts in a low interest environment?
Has the FCA ever done anything to suggest competence? The current bungling boss of the BoE was formerly head of the FCA. Is there a pattern emerging?
@ Diogenes
Yes, appointing Andrew Bailey.
You obviously don’t remember the incompetence level of the FSA ansd the SFA (whose first self-justifying report revealed, to anyone capable of arithmetic and thought, that the cost of its operations to protect investors – indirectly but wholly charged to those investors – cost ten times as much as it saved them, sothey were 9 times as much worse off than if it had never existed).
I have the impression – not necessarily accurate – that when I was a lad there were two financial regulators. The first was the eyebrow of the Governor of the Bank of England. The second was The Monopolies Commission – subject of the excellent joke “why is there only one?”
Actually there must have been a third. Didn’t the Board of Trade supervise insurers?