Hedge Fund managers of the world unite. City reform: is this an emerging dividing line?

Gordon Brown on City reform (BBC):

Gordon Brown has pledged to “clean up” the financial system following the rescue of Britain’s biggest mortgage lender HBOS by Lloyds TSB.

The prime minister said he had taken “quick action” to “maintain the stability of the financial system”. But he also had plans to tackle “irresponsible behaviour” by banks in the future.

David Cameron on City reform (FT):

“David Cameron has called on centre-right leaders across the world to unite to defend capitalism, warning that the left could use the banking crisis as an excuse to “wreck” the financial services sector.

“The Conservative leader said the UK and other countries should not overreact to the turmoil on world markets, and that “sensible” steps to improve transparency and regulation were the correct approach.”

UPDATE: Interesting point from Janet Daley who thinks that the actual issue is the lack of Conservative response.


#1 Paul Cotterill on 09.18.08 at 11:10 pm

I tried to post this comment to your blog on the finance dividing line, but it didn’t work – or at least i don’t think it did – so here it is:

Well I certainly hope it’s an emerging dividing line.

If Labour doesn’t take this opportunity to create clear blue water between itself and the Tories on why the current financial system is systemically unfair in the way it rewards ‘success’ but then ‘socialises’ failure within that system (ie. the masses pick up the tab), then it needs its collected head examined.

You mention Hedge Fund Managers jokingly, but there’s a serious point to be made about how they will still seek to profit from the crisis and longer term downturn, by using the bear market condition to maximise their short selling-based profit (albeit within the restrictions of temporarily lessened liquidity which will make borrowing for leverage more difficult).

Gordon and Alistair could do with having a quick word with those nice people at CCLA about, rather than the commercial investment fund lot, who will tell him lies about Hedge Funds being good for us all really and how they get a bad press because no-one understands them – no-one understnads them because they’re completely untransparent on purpose.

#2 Letters From A Tory on 09.19.08 at 9:44 am

I find it laughable that Brown is turning on the City, when this time last year he was cuddling up next to them – and let us not forget that Brown was the one who let the City bonus structure remain intact for 11 years, so claiming it is broken hardly paints him in the best light.

Maybe his sudden interest in the City bonuses is related to his desperate need to appeal to core voters?


#3 Jeremy Poynton on 09.19.08 at 12:37 pm

So Gordon has had 11 (eleven) years to “clean up the City”. How come it took so long? One might almost think he was in cahoots with them, given that the he has given that selfsame

#4 Jeremy Poynton on 09.19.08 at 12:38 pm

So Gordon has had 11 (eleven) years to “clean up the City”. How come it took so long? One might almost think he was in cahoots with them, given that the he has given that selfsame City free rein to loot and plunder the past … 11 years.

Brown must be an idiot if he thinks people don’t see through this shit.

#5 tory boys never grow up on 09.19.08 at 8:57 pm

About time we noticed – manipulation of markets isn’t just something that happened in the last week. Look at the ramping up of commodity prices – if the oil market was really inefficient would its price really have risen so much so quickly. As social democrats/socialists aren’t we meant to believe that markets are not always efficient and need some management/regulation (although there is smart and not so smart regulation – and our record on this score is checkered to say the least).

Worth looking at the number of hedge fund managers who have been among recent donors to the Tories.

#6 mark hendry on 09.24.08 at 11:10 am

Cameron’s right about one thing. This financial catastrophe, exposing everything that’s wrong with capitalism – the greed, the incompetence, the selfishness – ought to spell the end for the traditional capitalist model. But can we rely on Brown to do anything given how he and Blair spent years assiduously courting the City?

I’ve become so disillusioned I’ve been checking out cranky online parties, except they don’t seem so cranky anymore. Is the Meritocracy Party the real party of social justice?

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