King is apparently lining up with the Tories as they get set to take power. So this proposed reform in Britain will be as gutless as Obushwa's.
Excerpt 2 is the best part though. It would mean you can borrow to build a factory, or buy a car, or go to law school. But you can't borrow money, not at least if you run a certified 'fund', in order to enter the casino of the marketplace or to make acquisitions (which is the key to how private equity makes 20-30% returns on its deals). But if this guy was a Gravel adviser, about the only one in Congress who might listen would be Kucinich. Meaning, marginal, no political traction. http://www.nytimes.com/2010/01/27/business/global/27england.html?th&emc=th Excerpt 1 British Central Banker Favors Splitting Big Banks By LANDON THOMAS Jr. Published: January 26, 2010 LONDON — Mervyn A. King, the governor of the Bank of England, is an owlish, self-effacing man who, in contrast to his more outspoken peers in Frankfurt and Washington, strikes a public posture that borders on the demure. Skip to next paragraph Chris Ratcliffe/Bloomberg News Mervyn King supports the idea that big banks should separate proprietary trading activities from core deposit-taking functions. But as outrage over lush banking profits gathers steam on both sides of the Atlantic, Mr. King finds himself at the vanguard of a growing movement that argues that big banks must separate their higher-risk trading and investment banking businesses from their core deposit-taking functions. Last week, such a proposal pushed by the former Federal Reserve chairman Paul A. Volcker made headway. President Obama shocked Wall Street by proposing that large banks that collect customer deposits be banned from engaging in proprietary trading activities. --------------- Excerpt 2 Since that speech, Mr. King has become a cult hero of sorts to many academics and others who advocate even harsher measures to keep banks on the straight and narrow. One who has had his ear is Laurence J. Kotlikoff, a professor at Boston University who wants all financial institutions — from hedge funds to private equity funds as well as investment and commercial banks — to reconstitute themselves as mutual funds, meaning they would not be allowed to borrow to increase the size of their investments. The goal would be to prevent the types of debt-fueled bets that had such dire consequences. That Mr. King would just about endorse such a proposal for the entire financial industry — he referred to Mr. Kotlikoff twice in his testimony on Tuesday — suggests that he may be inclined to push further than Mr. Obama. “He is interested in this idea,” said Mr. Kotlikoff, who presented his idea to Bank of England officials last November and says he will do so again next month. “And he understands the depth of the problem.” ------------------------ http://en.wikipedia.org/wiki/Laurence_Kotlikoff Policy Reform Kotlikoff has actively proposed extremely simple reforms of the U.S. financial system, tax system, health care system, and retirement income system. His proposed reform of the financial system, discussed in Jimmy Stewart Is Dead, called Limited Purpose Banking, transforms all financial companies with limited liability, including incorporated banks, insurance companies, financial exchanges, and hedge funds, into pass-through mutual funds, which do not borrow to invest in risky assets, but, instead, allows the public to directly choose what risks it wishes to bear by purchasing more or less risky mutual funds. Limited Purpose Banking keeps banks, insurance companies, hedge funds and other financial corporations from borrowing short and lending long and leaving the public to pick up the pieces when things go south. Instead, if forces financial intermediaries to limit their activities to their sole legitimate purpose -- financial intermediation. Limited Purpose Banking substitutes the vast array of extant federal and state financial regulatory bodies with a single financial regulator called the Federal Financial Authority (FFA). The FFA would have a narrow purpose namely to verify, disclosure, and oversee the independent rating and custody off all securities purchased and sold by mutual funds. _______________________________________________ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
