Tim Geithner, the American Secretary of Treasury, was calling for more stringent controls of dubious derivative tradings conducted by dubious operators with dubious modus operandi. He cautioned other regulators not to compromise their regulatory systems to accommodate the rogues of the finance industry that the US is trying to regulate more closely with more stringent rules and regulations. His fear is that while the US was tightening the screws, other regulations are playing easy to take in the rogues and their business. The danger the rogues and their malpractices were thrown into the wind at their own risks.
Singapore and Hongkong have stood up to defend their regulatory systems as much more stringent than the Americans and told the Americans to look elsewhere. Our systems are in good hands. No problems.
I also think so. Hope there is no outcry like the minibond crisis in the future. The next one or two years could be telling if we are doing the right thing. As things are going, my prediction is that some operators will start to retrench staff and cut cost as the business is not generating the returns to cover their overheads, that is, if things do not improve. That will be the test of whether we are doing the right thing or the wrong stuff. The rest are just rhetorics. Let’s wait for the real stuff to unfold.
Talking about Lehman toxic bonds; the facts were these bonds were not approved in US & Europe to be sold to retail but only institutional investors. But in Singapore & Hong Kong supposedly more conservative regulators approved them to be sold to retail. At least in HK case, the authority step-in and corrected their mistake by ensuring almost full compensation for retail investors.
ReplyDeleteQuite a few "snoring" and got away with it....one even promoted big time to Teaching Minister.
Tim Geithner is having a hard time....needs to borrow a lot of money once FED stops printing & QE music stop.
They used to say about the pot calling the kettle black but now it is just vice versa.
ReplyDeleteBut I believe, whatever one pig may accuse another of different crescendo of snoring, they all eat at the same trough.
I feel good for us to be confident enough to tell the Americans off. But I feel scary if our confidence is not out of full knowledge of where we are going.
ReplyDeleteGeithner knows the real danger of these derivatives and their manipulators. He went through it all. We may be merrily whistling as if we know it all but walking straight into quicksand.
Paul Geithner, the American Secretary of Treasury...Never heard of him, you mean Timothy Giithner
ReplyDeleteThanks for the correction. I am always confused with western names as everyone is either a Tim, a Paul, a Dick or a Harry. Very easy to mix up. But I surely will not forget President Hussein Obama: )
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