Wednesday, 15th October 2008

Brussels: We're here in the midst of the financial crisis to find out how the European Commission and all these other terribly important and competent people are going to save us from whatever mistakes have been made in the past and prevent them from happening in future.

The basic briefing document gives an idea of what they're thinking. Most of it is in favour of motherhood and apple pie, the financial equivalent of insisting that yes, indeed, kittens really are cute.

There are a couple of points that show a disturbing lack of knowledge about the subjects under discussion, the financial markets, how they work and how they should be regulated.

Lack of knowledge, of course, is not something you really want to find in those who intend to solve the system's problems. For example, they call for a robust central clearing facility for OTC credit derivatives (yes, I know that this is boring and technical) without realising that one already exists. It’s called the Depositary Trust and Clearing Corporation. It is really rather worrying, that they don’t know this.

Other problems are more conceptual. For example, "…ensure that interactions between the financial sector and the real economy are understood." Yes, that's all very well, but what do they think economists have been trying to work out for the past 300 years?

Then there is the question of the European Union's role in all of this. The solutions we have had, which are indeed looking like as if they might work, have come from national governments working together at a time when they need to. There's nothing wrong with international co-operation, nothing at all. Yet, as we can see, such international co-operation does not require the EU for it to happen.

We can co-operate when we need to and then, in the vast majority of what we do, go our own sweet way.

Of course people here are saying that it all shows we need greater integration, more passing of power to Brussels. Yet the very fact that nations have been able to co-operate without Brussels shows that this simply isn’t necessary.

Finally, there’s something that would make a horse laugh: "Changes by the IASB must be rapidly implemented…credit rating agencies must immediately…..Basel Committee should immediately….."

There's a certain show of urgency there, no? But then they say:

"These new rules should be included in the amendment of the EU capital requirements  directive."

The plain fact is that it takes years to amend a directive, to get all of the national jurisdictions to bring it fully into law and so on.

If you want to do things quickly an unelected bureaucracy operating in 22 languages simply isn't the way to do it. But that's what they're recommending, just as they always do, for they truly do believe that unelected bureaucracy is the way forward.

As, of course, we in UKIP don't.

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