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Two simple steps to transform the culture of banking and to forestall the next outrage

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It’s time to privatise commercial risk in banking and insist on prudent accounts. Government should: Eliminate moral hazard from the financial system by implementing this measure to make bank directors strictly liable without limit and to treat as capital both directors’ personal bonds and, for five years, the bonus pool. Introduce prudent bank accounting so banks can’t game the rules using derivatives to manufacture illusory profits from unrealised cash flows. The banking system isn’t capitalist It’s not capitalism when private individuals […]

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The Financial Services (Regulation of Derivatives) Bill

Steve Baker (Wycombe) (Con): I beg to move, That leave be given to bring in a Bill to require certain financial institutions to prepare parallel accounts on the basis of the lower of historic cost and mark to market for their exposure to derivatives; and for connected purposes. I rise not as an expert in derivatives or derivative accounting, but as someone who has wrestled with the problems of the banking system in the company of experts, both academic and […]

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ConservativeHome’s Platform: Steve Baker MP: It’s time to bring casino banking into the light

Last year, I learned how derivatives can be used by banks to manufacture the illusion of profit. Tomorrow, I am introducing a ten-minute rule bill which would bring this casino banking into the light. Read more via ConservativeHome’s Platform: Steve Baker MP: It’s time to bring casino banking into the light.

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How to destroy the British banking system

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Over at The Cobden Centre, my friend and colleague, financial engineer Gordon Kerr, explains how to destroy the British banking system through the use of derivatives which take advantage of the regulatory system, then sets out four measures to solve the problem: Nine years ago I worked as a structuring engineer in a three-man team within the investment banking unit of a major British bank. One of us was very bright. He stunned me one day with an idea as to […]

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