tag:blogger.com,1999:blog-6467188533268933897.comments2021-12-30T23:17:45.597-08:00Capital ravingsGreghttp://www.blogger.com/profile/00082917097220145018noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-6467188533268933897.post-63756003796181293802011-04-10T19:13:03.596-07:002011-04-10T19:13:03.596-07:00Excellent! You hit all the nails on the head.Excellent! You hit all the nails on the head.Anne Marie Cunninghamhttps://www.blogger.com/profile/05289974924032448531noreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-59203672898970533212011-04-10T18:59:55.916-07:002011-04-10T18:59:55.916-07:00Excellent!Excellent!Anne Marie Cunninghamhttps://www.blogger.com/profile/05289974924032448531noreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-22137598240316396562011-04-08T15:56:52.216-07:002011-04-08T15:56:52.216-07:00One of the most succinct and coherent analyses I h...One of the most succinct and coherent analyses I have seen on Governemnt policies and the real issues facing the NHS and society.<br /><br />Thank you Greg, I struggled to find any serious points worthy of comment.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-28768694999043345522011-02-10T23:39:00.555-08:002011-02-10T23:39:00.555-08:00Great information thanks for sharingGreat information thanks for sharingCardiac Care Centrehttp://www.krishnacardiac.com/noreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-48985583652069693952010-11-17T16:41:48.950-08:002010-11-17T16:41:48.950-08:00Not quite, I'm proposing that national governm...Not quite, I'm proposing that national governments do this. <br /><br />Ideally, you'd raise all risk weights to 100% as per Per, then go a step further by allowing governments to lower specific 'hot spot' weightings for banks in their country, such as for lending on green tech, infrastructure, regional or SMEs, according to the political agenda of the day. <br /><br />It's a bit like using fiscal measures to influence lending but with capital instead of tax. It could plug into existing bank management systems but leave banks to make their own risk assessments. <br /><br />Instead of setting risk and return to maximise ROE per Basel rules (which act like a tax on growth and do not stop risk build-ups), banks would trim their balance sheets according to a mix of their own commercial/prudential judgement and the public policy goals set by the govt. <br /><br />It replaces capital discrimination based on dodgy risk assessments with discrimination based on beneficial public policy goals, making banks useful again, if you likeGreghttps://www.blogger.com/profile/00082917097220145018noreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-52524438824609219132010-11-16T13:53:39.178-08:002010-11-16T13:53:39.178-08:00As I read your post, Greg, you are proposing that ...As I read your post, Greg, you are proposing that some decision-making authority other than the Basel Committee and its influence on legally mandated regulators, perhaps a bank's own internal risk management procedures, assign a risk-leverage factor to each loan in determining how far a bank can expand its loan portfolio.<br /><br />Doesn't that already happen in practice? IOW, don't the regulators determine after loans have been made whether a bank has kept within "good practice" (as measured against rules of thumb proffered by Basel for aggregated loan categories) and, if it hasn't, negotiate with its leadership group a "correction" process.Angus Cunninghamhttp://www.authentixcoaches.comnoreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-61398822374398899232010-09-06T10:52:55.257-07:002010-09-06T10:52:55.257-07:00Greg wrote:
"One idea is to tax short-term c...Greg wrote:<br /><br />"One idea is to tax short-term contracts, as Angus Cunningham proposes with his differentiated speculative Financial Transactions Tax, or dsFTT. This serves as a proxy for speculative activity, on the basis that if producers normally use 12-18 month contracts, anyone trading a 1-week or 1-month futures contract is probably a speculator. <br /><br />That may often be the case with securities, but agricultural commodities are a bit different. If a producer needs a short-term contract there’s a good chance he really needs it: perhaps a food company extending its hedge as prices spike, or a farmer trying to secure a minimum price for an unexpectedly big harvest as prices fall away. For soft commodity derivatives, a FTT on short-term contracts could have a nasty side-effect of penalising producers, making it less effective as a speculative curb and hard to implement."<br /><br />The dsFTT as I propose it would not have the perverse side effect you imagine it would, Greg, because it would be implemented through a Category Committee. The dsFTT would be applied at a different rate, or schedule of rates, according to the conditions pertaining in the market for the category of real goods and services referenced by the derivative contract entered. One category might be, for example, cocoa beans of different grades; another category might be Brazilian sweet crude oil; and so forth. What those conditions are, of course, is different for each category. Therefore the dsFTT time horizons and rates would also be different in each category. And it would be the responsibility of each Category Committee to keep the time horizons and rates calibrated in a manner that is outlined in the paper at:<br /><br />http://www.authentixcoaches.com/dsFTTFinReg.htmlAngus Cunninghamhttp://www.authentixcoaches.com/dsFTTFinReg.htmlnoreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-73926625899080879142010-08-20T13:52:45.949-07:002010-08-20T13:52:45.949-07:00Gillian Tett's article in FT's "Insig...Gillian Tett's article in FT's "Insight" today tells us that:<br /><br />"(Senator) Kaufman argues that it is not good enough for the SEC just to tackle the symptoms of the flash crash (say, by imposing circuit-breakers); he wants to address the root causes too, by making markets more “truly” liquid. And he offers a pretty sensible set of proposals for doing this: regulators should create incentives to move more trading on to regulated exchanges; they should monitor strategies of high-frequency traders; they should force HFT entities to pay a fee per message, not per trade; and HFT entities should also hold more capital."<br /><br />I welcome the new emphasis in the Senate on ROOT causes rather than on superficial symptoms capturable in a trivializing phrase. But I vehemently oppose creating incentives to move trading to regulated exchanges. There is a necessity for central registration of derivative contracts, of course. And we all acknowledge that the trading community en masse has been guilty of too much gambling and not enough investment in the economy as a whole. So introducing an incentive to trade centrally is only going to put more money into a community that has yet to rein in those of its members who indulge in rampantly dysfunctional gambling. Unfortunity, this community doesn't in general rein in its more conscienceless bounders; rather, it seems to adulate them.<br /><br />What, as members of a dynamic economy we all need -- in my strong opinion as an experienced executive coach with clients including a manager of trading for a Canadian bank -- is that ALL trades be registered and in this age of computers, there's no excuse not to have a central registry. Additionally what we need is that ALL derivative trades be filtered automatically in this central registry, so that the capital, energy, and potential for rationality on a human scale of derivative trading be harnessed for the good of the economy as a whole.<br /><br />Filtered and harnessed? How might those very desirable tasks be accomplished in practice?<br /><br />Well, for over a year now there has been a strong move in Europe and one now gathering momentum on the US West Coast to institute a tax on financial transactions (an FTT). Unfortunately that movement appears to be being driven by haste, impatience, or raw vengeful anger rather than by intelligent, fearless, and effective determination to harness speculative investment skill sets and resources for the good of the economy as a whole.<br /><br />The FTT idea would be a good one if it were to discriminate rationally between functional and dysfunctional trading in derivatives and synthetic derivatives. How that can be done is the subject of a paper entitled "Why a 'Calibrateable dsFTT' makes sense: Beyond the Toronto G20 and the Dodd-Frank Bill". "dsFTT" stands for differentiated speculative Financial Transaction Tax, and the reasons why a dsFTT makes sense are explained at the link http://www.authentixcoaches.com/dsFTTFinReg.html, where practicable suggestions for how a dsFTT may be calibrated in a rational way (again from the point of view of the economy as a whole) are also made.<br /><br />Senator Kaufman was clearly recognizing that high-frequency computer-generated trading, which is, I believe, virtually always in short-term contracts, does require, for the good of all of us and especially of the capital community, to be regulated boldly and effectively. There's nothing bolder than a central registry and an FTT tax, and nothing more likely to assure a rational harnessing of the skills of speculative investment to help plough the fields of the whole economy, rather than only the self-erotic portion of it that speculation so often has been, than a calibrateable dsFTT. IMO, of course.<br /><br />Angus CunninghamAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-60987448547248082632010-08-09T09:25:36.876-07:002010-08-09T09:25:36.876-07:00Great contribution, Greg! At last I've found ...Great contribution, Greg! At last I've found a blog where the ideas by which a differentiated speculative Financial Transactions Tax (dsFTT), which winnows out the "good" from the "bad" forms of speculative activity, can be discussed with the goal of progress rather than one party or another "winning". You can find my contribution at the URL address given with my name.<br /><br />I agree with Joseph Ackermann's expectation that "FSC+FAT+FTT+Basel3 = too much cost for banks to bear" on the ground that Basel 3 may be unnecessary if the FTT is a dsFTT.<br /><br />I look forward to getting a copy of the full version of Neil McCulloch's impending review of the Tobin Tax, and appreciate very much your preview here. My suggestion for Neil and you is that, as far as possible, the term dsFTT be used instead of either Tobin or FTT. My reason for this is not to dishonour the work of Tobin or his mentor on this subject, Keynes, or the work of the "Robin Hoods", or to promote my own (non-proprietary) moniker of dsFTT. It is rather to give practical recognition to the reality that, amongst the orthodox conservatives whose understandable anxiety people like Carney and Strauss-Kahn must diffuse, the monikers "Tobin" and "FTT" have become a trigger to inattention, and we can't make fast or accurate progress with that impediment.<br /><br />I think the most novel idea in the dsFTT concept is its proposal for organization of the means for its periodic calibration. The idea is quintessentially democratic while not be "demogoguic". I would very much appreciate your or Neil's or Joseph's comments on that specific especially.<br /><br />Angus CunninghamAngus Cunninghamhttp://www.authentixcoaches.com/dsFTTFinReg.htmlnoreply@blogger.comtag:blogger.com,1999:blog-6467188533268933897.post-3700842003196302972010-02-20T22:46:17.176-08:002010-02-20T22:46:17.176-08:00Thank you very much Greg. This is a thought provo...Thank you very much Greg. This is a thought provoking piece. There is more to be said and done, no doubt. As you said near the top, some of this is not necessarily best achieved on an anonymous chat forum. Even so the Robin Hood Tax policy and research team will be posting more detail regularly over the coming weeks. I am not a policy expert and certainly no economist but would like to reassure you that many of the questions you ask are not unfamiliar, our team discuss such things regularly. We have a challenge: to communicate the essentials in a clear and understandable way that inspires people while simultaneously addressing and debating the technicalities. It might take a little while to get the balance right. Contributions such as yours are vital to help get that balance right. Thanks again.ELhttp://robinhoodtax.org.uknoreply@blogger.com