FSA hellbent on destroying London as a financial centre

The FSA - which operates as a Quango with only the slightest amount of democratic oversight and legitimacy - intends to bring the number of paper-pushers to the incredible total of 3700 by the end of 2010. If one remembers that the City of London worked perfectly smoothly for centuries and well into the 1980s without any monstrous 'oversight' by bureaucrats the scale of this misdirection of taxpayer resources becomes more evident. When Lord 'Alliswell' clarifies that he considers much of financial market activity as 'economically' not useful he indirectly admits the intellectual bankruptcy of his thinking. To enter the debate about what is or is not 'economically useful' is a debate which only leads to the quicksands of moral do-goodism where some (usually self-appointed) authority tells other people what is good for them. The good Lord owes much of his status (and income!) to his being in favour with those in power and very little to him supplying 'valuable economic services' to the citizens. The savers in this country are those that really pay for the empire building activities of those behind the ever-expanding army of bureaucrats in the FSA. That all this spending will lead to the inevitable decline of the City of London as a financial centre is probably of no concern the the authorities. They may well talk the talk in favour of the City but one should watch what they are doing!

Deutsche Bank's Ackermann - danger of PR own goal

Deutsche Bank's Josef Ackermann fully deserves his 2009 compensation which puts him top-of-the-league for a DAX Chief Executive. It is still moderate compared with pay at some of his banking peers but it does not help his position in the global discussion about banking reform as 10 million Euro is still an amount that is way beyond salary levels that the public - and regulators, politicians and the media - feel comfortable with. To escape this dilemma it would be worthwhile to review the compensation structure of senior management - should it really be paid on the same basis as may be appropriate for a car salesman?

Bawag - problems of Private Equity or Hedge Fund Control

The diffuse ownership structure of the Austrian BAWAG Bank - where an alternative fund management firm has orchestrated a buy-out consortium a few years ago - is an apt illustration of the problems created by allowing alternative asset managers to control banking institutions. Apart from the fact that the financing often is debt-heavy there is the potential risk that conflicts of interest are not controlled properly. The age-old temptation of using a banking institution to supply credit on easy terms to controlling shareholders is one of the key areas that banking regulators have to focus on. There is also a potential conflict of interest when other banks (Goldman Sachs, Lehman Brothers in this case) are shareholders in competing institutions.