LONDON - If you thought some of the responses and letters to regulators and legislators covering derivatives reform have been feisty already, take a look at some of the input the U.K. Independent Banking Commission has been given over the past few weeks.
As reported last week, industry associations and U.K. firms warned the Independent Banking Commission about the implications that ring fencing could have on a banking group’s derivatives use. From some respondents, those warnings over ring fencing and the current regulatory policy of the U.K went further. Some noted that the U.K. Government’s policy could bring “mass anarchy” and would benefit “criminals,” if we take two separate responses into consideration.
Here are a few more choice cuts:
“If an investment banker ‘slices and dices’ junk debt, sends it to a rating agency and manages to get essentially the same debt given US Treasury status--that’s clever......but stupid. An extreme example, perhaps, but the same attitudes lie behind ‘clever’ off-balance sheet wheezes, complex transaction structures that avoid tax, and so on. Think of ‘financial innovation’ as another name for ‘rules (or regulation) avoidance’.”—Andrew Jukes
“If Lloyds keep[s] on being bullied and bashed by the Governemnt [sic] and are not allowed to recover, for saving the Country's economy, there will be mass anarchy. Pardon my French but 'what the Fcuk is going on with the share price of Lloyds'?”—Alex Zimmerman
“A complete ban on the vast majority of the Financial Services sector’s products being sold in the UK and also action ensuring that any Institution that trades them anywhere in the world is prohibited from trading any products in the UK would go a long way to solving the problem. The regulation of the Financial Services sector would also be simplified.”—Matthew Colley
“This is a copy of what I sent to Philip Stephens of the FT. The FT pays no attention to anything I say: please would you help.”—Alexander Hopkinson-Woolley
“I once believed in banking; now I know that, as John le Carre so tellingly puts it, they are 'necessary evils'. But if legislation would keep them in place to perform only those tasks necessary for supporting a healthy national economy, they could fulfil [sic] that necessity and become a national good.”—Peter Fricker
“Just remember, Vince Cables’ Socialist / Communist ideals playing to the media in bashing the banks is wrong and very damaging. The only ones to benefit are the criminals, the Hedge funds that ‘Short’ (and ‘Blind Short’ - yes that is still going on) the stock to gain £Billions.”—Va Bronjewski in reference to the stock of Lloyds.
“Aren't the banks cocking a snook at the government and the people by persisting in not lending, taking risks much as before the financial crisis, paying their people unconscionably and rejecting their share of the blame for the financial troubles caused?”—Thomas Handler
So take a moment to sympathize with derivatives expert Bill Winters, the ex-co-chief executive of JPMorgan’s investment bank, and his colleagues, who will have to sift through the collection of banker/hedge fund bashing responses before releasing their final report setting out reform options aimed at stability and competition in the U.K. banking sector.