Music

American hypocrisy

A few weeks ago, the whole world held its breath. Inspired by Paul Volcker, former Fed chief, Barack Obama has solemnly expressed its intention to overhaul American finance. Consider the following: limiting the size of banks and investment ban on own account on the riskiest markets (hedge funds and private equity). What every economist who removed the springs of the crisis had dreamed, the American president should he have done? Nothing is less certain. First, the Volcker plan leaves out many gray areas of the U.S. financial system. So it is with many “Bermuda triangle” regulations that allow entire sectors of American finance (such as the derivatives market) to escape almost any check. Thus it is also the nagging problem of bonuses for traders, which poisons the trading floor for many months. Let us stop deluding themselves in this field. 124 billion dollars in bonuses awarded by the 34 largest U.S. banks: it’s the equivalent of official development assistance or aid from the North to South, and twice the profit made in 2009 by all companies in the CAC 40! “Business as usual! “
But there is perhaps not essential. For the most part is, since the end of the Second World War at least, the ability of the U.S. government to hide behind the Congress to indefinitely reforms do not wish to implement. We can not claim to understand the United States if one considers that the Parliament of this country is as impotent as it is in France. In the United States, Congress dictates, only the tempo of reforms. So, just lost a congressional seat in Massachusetts for Barack Obama, threatened by the sword of Damocles of the midterm elections, is ready to compromise: Show loud and clear his willingness to bend Wall Street to please his electorate while trusting “his” Congress to defeat this attempt moralization of American finance. This is the (sad) reality of democracy in the United States, which regularly relativize the sincerity of the reformist impulses of Barack Obama.
But we can go even further and consider that Volcker is part of an overall plan that aims to strengthen the competitive ability of American finance. Judge for yourself: it is not a raft of reforms initiated by the three G20 (which have met since October 2008) which has resulted in an American retreat. The application of prudential rules of the Bank for International Settlements, known under the pseudonym of “Basel II”? Later perhaps. The promotion of “leverage ratio” (ratio that favors American banks from European banks)? An absolute necessity for Washington. The refusal to seriously regulate the derivatives markets? A profession of faith. The refusal of cooperation with the European authorities in accounting rules? Even punishment, same reason. The obstruction to any regulation of rating agencies, including the two world leaders are American (Moody’s and Standard & Poor’s)? An absolute evidence. Attempts to implode the European model of “universal banking” (which combines the most hazardous and those of the commercial bank, the less) by pushing the formal separation of commercial banking business and banking ? What more natural? These six examples demonstrate that the United States, undermined by its industrialization, will do everything to protect their finances.
What to do in this context, Europe in general and France in particular? First stand firm on the principles defined by the three G20, which had the merit of addressing – finally-sensitive subjects. Then do not lower its guard prescribed by better regulation but not alone. Finally, calling for help from the emerging global governance, and particularly China, which have been excluded from it by the United States for over twenty years, to form a tandem-emerging Europe can do Finally, fold the American finance, the primary cause of the crisis and the first “shooter of chestnuts from the fire” for over six months … This is not win but at least we can dream!

Previous ArticleNext Article
Felicia Hawke is one of the first authors to join our team and we are very proud to have her on board.She currently covers the celebrity and beauty fields.Felicia is addicted to good looks and a great beauty advisor.Contact her at Felicia.Hawke@dailygossip.org

Leave a Reply

Your email address will not be published. Required fields are marked *