inequality and the troika March 19, 2014Posted by Bradley in : inequality , add a comment
Last week the European Parliament adopted a highly critical resolution on Employment and social aspects of the role and operations of the Troika (a resolution based in part on input from people affected by the policies in question). For example the resolution regrets:
that the conditionality imposed in return for the financial assistance has threatened the EU’s social objectives for several reasons: the EU was ill-prepared and ill-equipped to deal with the problems that arose, not least the immense sovereign debt crisis, a situation that demanded an immediate response in order to avoid bankruptcy; while the programmes are of specific duration, a number of the measures stipulated under these programmes shouldn’t have been long-term in nature; the measures are particularly burdensome, mainly because the worsening of the economic and social situation was not noticed in time, because little time was allowed to implement them, and because proper impact assessments were not made of their distributional impact on different groups of society; despite appeals by the Commission, EU funds left over from 2007-2013 framework have not been used in a prompt manner; the measures could have been accompanied by better efforts to protect vulnerable groups, such as measures to prevent high levels of poverty, deprivation and health inequalities resulting from the fact that low income groups are especially dependant on public health systems
Ironically, on the same day the IMF Survey Magazine contained an article with the title Sound Policy Design: the Efficient Way to Cut Inequality which cited the IMF’s recent staff discussion Redistribution, Inequality,
and Growth and policy paper on Fiscal Policy and Income Inequality. This work suggests that inequality was a factor which contributed to the onset of the crisis. But, as the European Parliament points out, the IMF’s responses to the crisis have also exacerbated inequality in the “rescued” countries.
cameron on benn March 14, 2014Posted by Bradley in : britishness , add a comment
I am sorry to hear that Tony Benn has died. He was a magnificent writer, speaker, diarist and campaigner, with a strong record of public and political service. There was never a dull moment listening to him, even when you disagreed with everything he said
Is that really all he could think of to say? He might as well not have bothered. A magnificent writer? From the Guardian here’s part of what Shami Chakrabarti said:
In an age of spin, he was solid, a signpost and not a weathervane.
Nick Robinson writes that he was “one of the biggest political personalities this country has ever seen.”
market manipulation and sports March 6, 2014Posted by Bradley in : governance , add a comment
The UK Treasury has published a news release with the title LIBOR funds to support first Invictus Games in London (details of other payments from the fund to support armed-forces related projects can be seen here). According to the press release the Chancellor said:
I am pleased that we have been able to support the very first Invictus Games in London using the LIBOR fund. We’re using money raised from fines on those who demonstrated the very worst of values to support the very best of values, injured service personnel from around the world. This landmark event will be a real inspiration for future generations.
I have never really understood the rationale for applying these funds in this way. It seems to me that the Government has an obligation to support the armed forces in all sorts of ways and that relying on the happenstance of funds derived from fraud is not the way to go about providing the support. Then again, linking the two quite separate things almost makes it sound as though it was a good thing that people manipulated Libor over many years. What will the UK Government fund with proceeds from the investigations into manipulation in the foreign exchange market, I wonder? Early childhood education? Food banks? The dredging of canals? From this perspective we could say we need more fraud to help more people. But that can’t be right, can it?
third party debt orders and paying agents February 26, 2014Posted by Bradley in : markets , add a comment
The English Commercial Court (Mr. Justice Blair) has held in Merchant International Company Ltd v Naftogaz and the Bank of New York Mellon that there is no jurisdiction to make a third party debt order (these used to be called garnishee orders) with respect to funds held by a bank as a paying agent for a note issue. The reason was that the funds when held by the paying agent were not owed as a debt to the note issuer. And this was so even though the issuer responded to the judgment creditor’s attempts to obtain the funds designed for the investors by paying further funds to the paying agent, and some of the money was repaid to the judgment debtor:
Though the balance of the money was repaid in due course, I do not consider that this was pursuant to an obligation that was capable of being attached by a third party debt order. This avoids a conclusion that would mean that MIC had in effect itself created a debt by virtue of the action it had taken. Whilst it was suggested on its behalf in argument that it had “got lucky”, it does not follow that there was an attachable debt.
The doctrinal issues are different from those in NML Capital v Argentina but the decision does suggest it may be better to be acting as a paying agent in London than in New York.
uk: banking standards review February 10, 2014Posted by Bradley in : self-regulation , add a comment
As the FCA publishes its thematic review of Transition Management (the activity with respect to which the FCA fined State Street UK) and stories about banks’ compliance failures and the financial consequences of those failures seem to be in the news on a daily basis, Sir Richard Lambert publishes a consultation paper as part of the Banking Standards Review initiated by “by the chairmen of Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander, Standard Chartered and Nationwide.” Lambert says:
I am hoping for the widest possible response. I would like to hear from banks and building societies with UK operations; customers and consumer groups; professional bodies with members working in banks; bank staff and trade unions; the Bank of England, financial regulators and investors; politicians; and anyone else with an interest in banking in Britain.
The consultative document suggests that the proposed new organization and standards – which would be designed to turn banking into a profession, sensitizing financiers to the big picture and moral questions, and a standards body rather than a lobbying organization – should apply to foreign banks doing business in the UK as well as to UK banks.
problems with the culture of finance: fca sanctions state street uk January 31, 2014Posted by Bradley in : financial regulation , add a comment
The UK’s Financial Conduct Authority fined State Street UK £22,885,000 for overcharging customers in its Transitions Management (TM) business. The FCA press release states:
The systemic weaknesses in State Street UK’s business practices and control environment around the UK TM business were so serious that the overcharging only came to light after a client notified staff that it had identified mark-ups on certain trades that had not been agreed. Those responsible then incorrectly claimed both to the client and later to State Street UK’s compliance department that the charging was an inadvertent error, and arranged for a substantial rebate to be paid on that false basis. They deliberately failed to disclose the existence of further mark-ups on other trades conducted as part of the same transition.
The Final Notice says that
State Street UK failed to treat its customers fairly by allowing a culture to develop in the UK TM business which prioritised revenue generation over the interests of customers. As a result, the UK TM business developed and executed a deliberate and targeted strategy to charge substantial mark-ups on certain transitions, in addition to the agreed management fee or commission, that were deliberately not agreed with clients or disclosed to them.
But State Street had held itself out as adhering to the principles in the “T-Charter” a self-regulatory code of practice for participants in the Transitions Management business which provides that participants in this market should only impose charges they agree with their clients. State Street was a “founding signatory” of this Charter.
court of justice distinguishes kükükdeveci January 15, 2014Posted by Bradley in : eu , add a comment
In Association de médiation sociale v Union locale des syndicats CGT, the Court of Justice of the EU (Grand Chamber) has held that Article 27 of the EU’s Charter of Fundamental Rights cannot be invoked in a dispute between individuals in order to disapply a provision of national law implementing Directive 2002/14/EC which is incompatible with EU law.
The Directive established a general framework for informing and consulting employees (“employee is defined as “any person who, in the Member State concerned, is protected as an employee under national employment law and in accordance with national practice.”) Article 3(1) of the Directive limited the application of the Directive as follows:
This Directive shall apply, according to the choice made by Member States, to: (a) undertakings employing at least 50 employees in any one Member State, or (b) establishments employing at least 20 employees in any one Member State. Member States shall determine the method for calculating the thresholds of employees employed.
Article L. 1111-3 of the Code du Travail establishes rules for calculating the relevant number of employees for the purposes of the Directive. A dispute arose as to whether the Association de médiation sociale (AMS) was subject to the Directive’s requirements. The Court of Justice held that the French rules were incompatible with the Directive:
An interpretation of Directive 2002/14 according to which Article 3(1) thereof allows the Member States to exclude from the calculation of the staff numbers of the undertaking a specific category of workers on grounds such as those put forward by the French Government in the case in the main proceedings is incompatible with Article 11 of that directive, which requires Member States to take all necessary steps enabling them to guarantee the results imposed by Directive 2002/14, in that it implies that the States would be allowed to evade that obligation to reach a clear and precise result imposed by European Union law … it must therefore be concluded that Article 3(1) of Directive 2002/14 must be interpreted as precluding a national provision, such as Article L. 1111-3 of the Labour Code, under which workers with assisted contracts are excluded from the calculation of staff numbers in the undertaking when determining the legal thresholds for setting up bodies representing staff.
Article 3(1) of the Directive was capable of producing direct effects, but not between private parties (which AMS is, as “an association governed by private law, even if it has a social objective”). The Court then considered whether Kükükdeveci (where a national court was instructed to apply the general principle of non-discrimination on grounds of age, as given expression in a directive, disapplying contrary provisions of national law if necessary) might help. It didn’t. Art 27 of the Charter provides:
Workers or their representatives must, at the appropriate levels, be guaranteed information and consultation in good time in the cases and under the conditions provided for by Union law and national laws and practices
The Court said:
the facts of the case may be distinguished from those which gave rise to Kücükdeveci in so far as the principle of non-discrimination on grounds of age at issue in that case, laid down in Article 21(1) of the Charter, is sufficient in itself to confer on individuals an individual right which they may invoke as such.
The Court suggests that a damages remedy might be available in these circumstances – the usual next step, although I don’t know how useful it would in fact be in such a case. And there isn’t much in the judgment to allow us to know which general principles will merit Kükükdeveci treatment and which will not.
financial conduct authority website feedback survey January 10, 2014Posted by Bradley in : stakeholders , add a comment
I find the pictures on the FCA website really irritating: presumably the pictures of attractive people are supposed to make the website more appealing but I don’t know what they have to do with the FCA’s functions. So, seeing that the FCA was carrying out a website feedback survey I clicked on the link. The first question is “Are you visiting the FCA website today as a consumer or on behalf of a financial services firm?” the possible options are as a consumer or on behalf of a financial firm. No “other” option. Perhaps they don’t think journalists or academics are likely to participate in the survey? Or they only care about what consumers and financial firms think about the website?
justice in 2014? January 6, 2014Posted by Bradley in : law , add a comment
The criminal bar in the UK protests funding cuts by withdrawing labour. Nigel Lithman QC, Chairman of the Criminal Bar Association, complains that figures about barristers’ earnings released by the Government to the press (the Daily Mail) were misleading (citing the earnings of the better paid, rather than the median barrister). He writes:
lies , add a comment
Should not the Ministry of Justice be on our side? Should the Lord Chancellor not want a balanced picture given to the press?
The Guardian reports that a Wiltshire Vicar told a group of children about St. Nicolas. After parents objected he apologized to parents for having told their children the truth (he apparently said he had no intention of undermining the kids’ belief in Santa Claus). The article has this quote from one of the parents:
We wouldn’t just walk into the church during one of his services and tell everyone there that Jesus isn’t real. He’s a person of authority and it’s not his place to be telling the children that.
“It’s the older children who have suffered the most because their parents can’t really talk their way out of it like the parents of younger children can.
“Loads of kids went home crying – it has ruined Christmas for them. It wasn’t a nice story for children to hear, there were lots more he could have told. Not only has he spoiled Father Christmas for them, a lot of them are now questioning the existence of the tooth fairy as well.
Parents can’t talk their way out of it with older kids the way they can with younger ones. But why this need to have children believe in things that do not exist? Especially as a significant chunk of the Santa Claus story is too close to the idea of the bogeyman for my liking.
The headline for the Telegraph’s story reads: Santa Claus is not real, vicar claims to audience of primary school children. Claims?