Tonight:
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The Chancellor, Alistair Darling, sets out the Government's proposals for reforming the banking system in a White Paper today.
It manages to sidestep the fundamental question about regulation, namely, who should be in overall charge of monitoring the system - the Bank of England, the Treasury or the Financial Services Authority, the FSA.
At present, under Gordon Brown's tripartite system, responsibility is divided between the three. But the gist of the White Paper, that we should make sure that banks behave in a way that makes them less likely to fail and that if they do, they should not bring the financial system down with them, is plainly sound.
The proposals owe much to the admirable report produced by Lord Turner, head of the FSA, earlier this year.
The Government intends, for instance, to regulate any institution that poses a "systemic" threat to the financial system. As Lord Turner said: "If an activity looks like a bank and sounds like a bank, we regulate it like a bank."
The banks' creative use of off-balance-sheet instruments to hide risky lending will be regulated.
And the White Paper also endorses increasing the capital requirements of banks so that they put money aside in good times for the bad, and hold more cash equivalents to prevent runs on the bank.
Indeed, this approach was once the basis of old-fashioned prudential banking.
The populist element of the White Paper will be the suggestion that bankers should be paid in a way that ensures their pay is linked to long-term performance rather than short-term share price.
This may encourage a more responsible approach to risk-taking.
There are also suggestions for a more transparent derivatives market to ensure that institutions do not trade in products they do not understand, like securitised bad debt.
Other proposals are more tentative, for regulating credit creation by restricting the size of mortgage loans for instance.
What is interesting is that measures that commentators would have jeered at two years ago as restrictions on the market are now being soberly advanced and entertained.
Of course there are people in the City who warn that institutions will go elsewhere if regulation is too tough.
This talk carries less punch than it would once have done. We have, all of us, been badly stung by the credit crunch. We must regulate accordingly.
People's post
It is a measure of how much less we depend on the postal service than before that many people may not actually realise that a three-day strike by Royal Mail workers starts today.
The dispute is the result of a stand-off between the Communication Workers Union and Royal Mail management about modernisation.
Underlying all this is the continuing row about whether the Government should part-privatise the service or at least bring in a minority private-sector partner - a measure Lord Mandelson dropped in the face of a backbench rebellion.
It is an illusion to suppose that the future of the Royal Mail is anything but a profoundly political issue.
Both the Government and the Tories, who support part-privatisation, should realise that most of us, notwithstanding new technology, still rely on the mail, and the post office network.
The continuous whittling down of deliveries and reduced standards of service - not to mention post office closures - has affected us all.
This strike is an inconvenience, but it may, by raising the uncertain future of the Royal Mail, remind ministers that this is a public service that really matters.
No glamour for G8
The leaders of the most powerful nations on earth are gathering in Italy in the earthquake-stricken town of L'Aquila.
It was an inspired idea by the controversial Italian premier Silvio Berlusconi to site the G8 meeting there.
The world's top table can sometimes be too far removed from those in obvious need. This location brings them closer.
Reader views (1)
Who is running the shop 'UK PLc' whilst Pa McRuin-Broone is junketing at the G20 Knees-up. Was there a mystery phone call from Lord Meddlesone-pete to Baldrick Darling telling him what to do, so it has been revealed?
It has been guessed that Mr Meddlesome probably regards himself as Pa Broone's 'Consiglieri' to Nues Liar-bore's Maffia-Numpties. Its Meddlesome-pete who is pulling Broone's strings now. If Lord Pete was to threaten to resign, Pa Broone will 'Swamp his man-sized Pampers', shout, scream and throw his Cell Phones around.
- Uncle Vanya, East Anglia Area UK, 08/07/2009 22:59
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