Wednesday, 2 December 2009

Financial regulation

(Image from efutur.eu)
Alastair Darling writes rather a thoughtful article in the Times today - see here.

I largely agree with him in most of what he writes, but I am puzzled by this:

"The EU also needs a single rulebook for financial regulation, covering banking, insurance and securities; and a mechanism for national supervisors to co-operate in its implementation. That is why under the Swedish presidency the EU proposes to establish three supervisory authorities, one for each sector.

We must resist measures, however superficially alluring, that could undermine the effective functioning of our cherished single market. National supervisors, such as the FSA, must remain responsible for supervising individual companies. Making companies directly accountable to more than one authority is a recipe for confusion."

My difficulty is that he appears to invite a single regulatory framework including single supervisory authorities for each area of the financial markets, but then seeks to retain the national supervision of individual companies.

This conflicting position doesn't bode well, it seems to me, when Nicolas Sarkozy is polticking about what in reality he sees as French dominance over the single market and the City - see here.

From the European perspective, it is emphatically not in the interests of the EU for a French type of regulatory framework to be imposed any more than it is sustainable for the UK to retain the framework that existed prior to credit crunch. Both frameworks had their weaknesses in the international marketplace for financial dominance and while it is correct to say that the UK's version achieved dominance in the EU, it is not to be assumed that that was the position against the City's competitors in New York or the far East.

I have repeatedly explained my view that the FSA failed to regulate certain aspects of the financial markets ... but that failure related to an underestimate or even a failure to comprehend the systemic risks assocated with certain products and ideas, along with a willingness to ignore the activities of the biggest players. In my view, it also stemmed from a failure to appreciate that the European ideas of 'purposive' regulation would not work in a fast moving and ever changing environment of financial services - although it has to be said that the US regulatory model also failed to assess the risks adequately leading to difficulties there too.

One of the more interesting aspects of British legal development is that often criticised use of Royal Commissions to investigate what has gone wrong and to come up with ideas for the future and to overcome to failures of the past. What we need to do is to ensure that the regulatory frameworks that we create for our financial institutions in the wake of the credit crunch are ones that are workable and that remove the emotion and narrow partisan politicking from the equation as much as possible.

What I think is required is transparency and clarity in regulation based on national regulatory bodies that work in the international markets beyond the EU as well as within it. We must not allow petty nationalist agendas from France or anywhere else (for that matter) to restrain the clear advantages that we in the UK and in the EU obtain from the City and its operations and the potential advantages that we can obtain from them in the future - and the EU should not be attempting to supplant the existing regulatory bodies. What the EU should be concentrating on is establishing minimum standards that enhance transparency and clarity and accountability and then leave the regulation to the national regulators.

The fact that the French President views a Frenchman's appointment to the EU Commission as being the start of a process that enable French ideas to dominate the debate in this area rather kills the assertion that the EU is in some way above the narrow political and nationalist agendas that dominated Europe in the past - perhaps the Japanese adage that business is 'war by other means' is the true view of the French establishment!

Tuesday, 1 December 2009

Politics ... and nothing but ...

If any more proof was required of Gordon Brown's cynicism and his intention to use anything, even to break with longstanding conventions and traditions, that he thinks may give him partisan political advantage, the announcement yesterday of the numbers of special forces deployed in Afghanistan really does prove that our Prime Minister is uninterested in anything other than his own interests!

That 'a source' in the Special Forces directorate is prepared to brief the Telegraph that “We are not at all pleased about this decision but it is the kind of crass thing Number 10 gets up to these days” reveals much about the hardening of attitudes in the military towards the fag-end that this Government represents.

This, of course, is the day after it was announced that the addition of 500 troops was accompanied by an expansion of equipment and other resources that, in the words of our current CDS, made the force in Afghanistan 'the best equipped ever'...

If anyone asks you why people are cynical about politics, just point them to this cynicism on the part of our Government ...

Friday, 27 November 2009

Blogs and polls

I don't know about you, but if like me you read the political websites it is always interesting to read the entries and some of the comments about polling data - especially when there appears to be considerable differences in the way in which the data is collected, collated and interpreted. A long time ago, I did Maths with statistics for A'level and I won't embarrass myself by telling anyone the result, but it has always amazed me that anyone can posit a representative result of a poll where fewer than 0.0025% of the population (about 0.005% of the voting population) are polled. For this calculation, I have assumed a population of 60 million, a voting population of 30 million and a sample size of 1,500.

The standard deviation is almost always larger than the differences perceived and yet the polling organisations are able to be more accurate and consistent than the simplistic view would consider possible. If is for this reason that, as I understand it, they weight different aspects of the data in order to come up with their estimates of the current position.

You can read more about how this process works on Mike Smithson's blog, www.politicalbetting.com. It is a testament to the sophistication of the maths involved in the processes of the polling organisations that they are able to be remotely accurate - and that sophistication itself comes from many years' of experience and published data and an assessment of what went wrong in the past(in particular the overstatement of Labour's relative position in 1992 and 1997 come to mind).

Today ConservativeHome reports the results of an online poll - this one about the supposed strength of fiscal conservatism in uniting the conservative coalition - you can read the article here. This is not unusal, and many sites of all political persuasions have produced similar poll results.

What is the value of such polls? I don't know what ConservativeHome's authors do with their raw data and I hope that they don't simply report that raw data without carrying out some sort of assessment of the value of it. Michael Aschcroft made a very interesting study into polling data after the 2005 election - and I understand that he has become something of a specialist in polling generally - so I would hope that there is some assessmeent and weighting invovled in the polling data published on the website.

If no weighting and assessment is carried out, then the value of polls of this nature is extremely limited. The people polled are self-selecting (and many of the people who comment on ConservativeHome are not conservatives, let alone Conservatives), the questions they are asked may not be sufficiently neutral in tone and the results may, in reality be of no real value whatsoever as a result.

Finally, we should always remember that what may move a small number of people to vote in a particular direction may be of peripheral interest only to the majority in a particular area. The result is that while minority may decide to vote in a particular way, the majority will decide to vote on a plethora of other issues and be completely unaffected by that 'minority' issue.

Thursday, 26 November 2009

Iain Dale and political impartiality

Iain Dale has written a blog criticising Sylvia Heal for breaching her impartiality as deputy speaker and for permitting her House of Commons Assistant use his HoC email to send a message to what he believes to be members of the local Labour Party encouraging them to attend a Cameron Direct event to be held in Halesowen - you can read the post here.

Sylvia Heal is the MP for Halesowen and Rowley Regis. She is an elected member and is a member of the Labour Party. The convention regarding complete political impartiality of the Speaker that results in the Speaker being, by conservative tradition, unopposed by members of the Conservative party when seeking re-election as Speaker, does not apply to Deputy Speakers. Deputy Speakers are supposed to be completely impartial in the House of Commons, but when it comes to their constituencies, they are still elected on a party basis and as party politicians.

David Cameron is visiting Halesowen to take part in a CameronDirect event - a party policial event - in the constituency for which, locally, the MP is currently the Labour Party's Sylvia Heal. As I understand it, these events are intended to be attended by voters who are not members of the Conservative Party. That another party wants to drum up attendance at the event is a 'good thing' for political engagement (and for the Conservative Party, I believe). I do not see how Sylvia Heal should properly be criticised for wanting her local party to attend and for trying to drum up that attendance (if indeed she were personally doing that). So in this, I completely disagree with Iain ...

As to the use of the HoC email address (could it not simply have been an error, Iain?) - whilst it is correct that in these rather puritan times our representatives and their staff are told to keep their use of publicly funded facilities only for their work as MPs and staff of MPs, and I agree that, for best practice, that is the position that should be maintained, I cannot really get worked up about a single email that merely seeks to drum up attendance at another party's event in the Constituency of an existing MP ... can you?

Wednesday, 25 November 2009

Hospitals and management ...

Our son is getting better and the prognosis is good. He came home yesterday and we can, as a family, start to get back to normal. The nurses, doctors and staff in the hospitals that we were in were wonderful. The medical care that he received was brilliant. We were kept informed of what was planned and I certainly felt that I understood what was going on and that my views and wishes were taken into account.

But ... the communication between hospitals (H was transferred from one hospital to another twice) was not as good as it could have been leaving us waiting for many hours for the bed that we were expecting on arrival on one of those transfers. The management of the patients is not always what it should be ... leaving anxious parents waiting for several days for a decision about a transfer to a hospital closer to home.

Communication between teams of medical staff do not always appear to be speedy - as an example, a cannula in H's foot was not working well and required replacement at about 7.30 one evening and after some IV drugs were administered at 10 that evening it stopped working completely; the doctors came to replace it at 2.30 am!