Global Financial System - Europe’s hollow four point proposals

Europe has put forward … four principles. First, no financial institution or market segment should escape the jurisdiction of a proportionate and adequate regulation, or … a monitoring system … financial players such as credit rating agencies or leveraged funds … possibly under the supervision of international financial institutions.

Second, the new financial system must be based on responsibility and transparency. The financial operations information system must be more comprehensive. Mechanisms encouraging excessive risk-taking, namely securitisation risks and business executives’ pay policies, should be controlled.

Third, a better understanding of risks is required to prevent crises … major international financial groups should be monitored by relevant national authorities through a collective supervision system. Multilateral monitoring must be reformed to prevent and absorb global imbalances.

Fourth, the IMF, which bears legitimacy and universality, must be made the pivot of a renovated international system. Its role and governance should be better structured, its means of intervention modernised and reinforced, including through new financing capabilities, so that it may act in a preventive manner and be of help to countries affected by the crisis.

The Washington summit should determine a working method. A period of 100 days should be used to prepare measures stemming from the principles defined today. (via We Cannot Afford To Fail-Op - Ed - The Times of India).

What does this mean …

It will become another European Competition Commission which will hold large corporations to ransom - and the power to have disproportionate influence, power, to maintain unequal relationships. This is the real motivation for European activism.

The 100 days focus

Is of course, to gain advantage of a weak, in-transition US leadership and a disorganized Third World. How will increased regulation, supervision, monitoring help excessive printing of US dollars? The Euro-Bloc has refused to name the one real issue - excessive dollar printing which led to this situation.

And that is why I am skeptical of the Euro initiative.