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opacity in financial regulation: iosco August 6, 2008

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IOSCO recently published a document with the title An Overview of the Work of the IOSCO Technical Committee in which it describes ongoing projects. The introduction to the document states that IOSCO plans to engage further with “stakeholders”, which IOSCO describes as “including the financial services community”. The document describes commentators on the prior consultation report as:

coming principally from securities market dealers, financial institutions and exchanges and organizations representing them, and from audit firms and auditor professional bodies. One submission was received from an organization of corporate treasurers.

There isn’t much indication beyond this about who the “stakeholders” are. But:

IOSCO has decided to organize once a year a high-level meeting with Stakeholders on an informal basis to exchange views on topics of mutual interest.

And also, as usual, when IOSCO describes reactions of various stakeholders to its proposals, it doesn’t identify the specific stakeholders, or state which views are held by which stakeholders. Over 3 years ago, the International Bar Association asked for greater transparency at IOSCO. More recently IOSCO actors have claimed a commitment to transparency. But that just doesn’t seem to be what we are getting.

more reflections on knitting and the financial markets August 5, 2008

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As I think about the grandma “sticking to your own knitting” stories, it seems to me that the phrase likely originally includes the idea of minding one’s own business – which is a bit different from the idea of focusing on core strengths. I’m not suggesting at all that knitting is frivolous, and thus has little relationship to the financial markets. Some practitioners take their work very seriously indeed: in fact their attention to detail might be useful in the financial markets (see, e.g., the recently published Recommendations of the SIFMA Credit Rating Agency Task Force, suggesting that CRAs could have been more focused on details and on communicating those details.)

miami welcomes new comparative llm students August 4, 2008

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We are in the process of welcoming the latest set of comparative LLM students to the University of Miami. For me the comparative and international LLM students are among the high points of being at UM, and I really enjoy having them participate in my business associations, international finance and EU classes. This year I’m also looking forward to co-teaching, with Jessica Morris, a symposium on the cross-border practice of law for LLMs only.

knitting and the financial markets August 4, 2008

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How did it come about that focusing on core business activities is described as “sticking to your knitting”? This is what HBOS’ CEO announced last week that the bank would be doing. Larry Elliott in the Guardian says that this is “a phrase that tells you much about the new mood of sobriety in a chastened financial sector.” The term seems to be accepted London market slang, but it’s also used by Michelle Leder at footnoted.org, and is also used in the world of politics (see also this brief critique of buzzwords (including the knitting phrase)).

A slightly different take on the phrase turns up in a sermon:

My grandmother had a saying. When someone was involved in things they shouldn’t be, she’d say, “They should stick to their own knitting.”

Other peoples’ grandmothers seem to have used the same saying. The quote above suggests that the crucial aspect of the phrase may be the focus on one’s own knitting rather than on others’ activities, which is consistent with the use of the phrase. But why has a phrase which includes the word knitting become so commonly used in the context of financial and business activity? Invoking the idea of knitting suggests a return to more traditional and careful practices. It’s sometimes used to mean that people are not being overly ambitious:

he was not going to have any plan, and after the fire it became even more obvious that we ought to be sticking to our knitting and not producing what he would call grandiose plans for the future.

But there’s a particular weirdness about the popularity of the knitting phrase in the context of corporate and financial activity. Knitting is an activity traditionally performed by women (often grandmothers), and many (most/all?) of the business leaders who use the phrase, seemingly unselfconsciously, to describe what they are doing are male.