Holding Financial Regulators to Account Post author By Philip Lane Post date August 23, 2011 This new ECB legal paper looks at the problems in making financial regulators accountable. Categories In Uncategorized 10 Comments on Holding Financial Regulators to Account ← Managing Credit Booms → Spain Announces Constitutional Amendment on Budget Balance 10 replies on “Holding Financial Regulators to Account” You start with public pressure. In Ireland it is lamentable. Why does the press still regard Quinn as some sort of hero when the illegal share support scheme for his Anglo cfd stake at least significantly contributed to a last minute panic over the reality of Anglo, and the Monte Carlo or bust “bank liabilities” guarantee”? Why does nobody demand explanations on a weekly basis, of the Reguators decision to investigate short sellers of Anglo inmstead of the illegal share support scheme? People went to jail in the UK for a much more trivial version of that – the Guiness bid for Distillers. Do you get the regulators the public deserve? @grumpy Because Quinn was completely unaware of the share support scheme arranged by Anglo which from memory happened in July 2008 but the Guarantee was on 29th Sept 2008 – a date fixed firmly in my mind – so the two are not linked, by time at least. @yields Quinn’s “access” to capital allowed him to prop up the Anglo share price – he was countering the long sellers and the short sellers. That was unfortunate as it blunted the message the share price was sending out. The illegal warehousing of his stake did indeed happen months before the government were bounced into the bank guarantee – but that is the point. There was no general market panic in the summer of 2008. If the share price had been allowed to fall it would have elongated the panic and the run on the bank. I am fairly confident this is correct because I found it difficult to get traction with other people over the question of how prudent it was to have deposits with Anglo during that summer. Later, amid the generalised credit crunch peak, suddenly everyone was all-ears and wanted out. The fact that what went on delayed and then truncated the opportunity the government had to decide what to do, was imho likely an important factor in the calamitous, panicked decision making that led to the bank guarantee. Now you can argue that Quinn was entitled in a legal sense to invest as much as he liked into those cfds – provided of course there was no funny business with oh, I don’t know, say Quinn Insurance for example as a consequence – but why is he revered still by so many, given the consequences for the state? As for the Anglo share support scheme, the silence of the clamour for prosecutions has been deafening. What does that say about the regulatory culture of the state and the Irish stock exchange? The Irish investment community wanted, and got something done, and sound and thunder about short-sellers of Anglo. Great move that. @ Grumpy While I agree with you about Quinn, what really gets my goat is the other 10 who did the same thing but did it with money borrowed from Anglo and we hear nothing about them? By the way yes we do get the regulators we deserve, and the politicians and the priests and the civic leaders and the business leaders and the police and the … and the …. and the….. I think the question should be – how to make public service accountable. Like so, http://www.herald.ie/news/euro630000-golden-handshake-for-the-bungling-banks-watchdog-pat-neary-1635637.html I don’t suppose there’s any chance we could backdate that accountability by a few of years and actually make it stick? Dream on. The ECB has continuously ignored its own responsibilities in failing to monitor dodgy capital flows within the Eurozone … quis custodiet or something similar comes to mind …. and Lorenzo is still on the Gov Council of the ECB …. but methinks Banca d’Italia will have more sense … Not in the mood to revisit the Irish response – i.e. massive pay offs, generous pensions, no inquiry, and overall Governance precrisis indistinguishable, with a few minor expections, to present ongoing crisis … the serfs have been taken for suckers … The dominant upper-echelon dictatorship continues to reign supreme …. @R. Browne http://www.herald.ie/news/euro630000-golden-handshake-for-the-bungling-banks-watchdog-pat-neary-1635637.html It sickens me to see this utter failure with 143k p.a pension while at the same time yours truly has had to emigrate to the Middle East and live (for a while at least) away from family as I could not afford tax increases brought about to sustain the pay and pensions for these suckers. And then there is hundreds of Nearys and Lorenzos still sucking six digit salaries from the taxpayers and looking forward to trouble-free retirement paid by someone else. If I wanted 143k pension, I have to save 3m Euros and hope my savings are not entirely eroded in the process by printing presses in Washington and Brussels or expropriated by the government through pension levies. Neary’s pension epitomizes the way the government spends your hard earned Euros. Comments are closed.