While You Were Working - February 9
Programming note: While You Were Working will be on vacation until the end of the month. The next edition will be March 1.
BIS, IMF boost collaboration on global regulatory infrastructure
The Bank for International Settlements and the International Monetary Fund announced they will be increasing their efforts to help regulators around the world implement regulatory reforms and prepare for the next crisis. This is a good thing.
One of the big lessons from the regulatory response to the financial crisis of 2008-09 is that regulators around the world need to do a better job of coordinating their actions – not only what they do, but when they do it. Regulators in the US were bold and swift with their response to the crisis. European regulators were relatively slow; and Europe and its banks suffered the consequences as their recovery was much slower (and even remains in progress for some).
Better coordination between regulators means the next global financial crisis might be met with an enhanced global regulatory response.
Credit crisis redux
Speaking of the regulatory response to the global financial crisis … the market plunge this week doesn’t appear to have many people worried about a repeat of the credit crisis. In fact, this New York Times analysis highlights how crisis-era regulations related to bank leverage have been very effective in keeping banks stable. That is a vindication of those leverage regulations and should be enough to justify keeping them in place. But of course, regulators are looking at rolling back those very same regulations.
A climate change surprise
It turns out the budget deal brokered by Congress in the wee hours of the morning includes a tax credit scheme that will boost investment in technologies aimed at battling climate change.
As noted above, WYWW is on hiatus for the rest of the month as I am off to visit a pair of friends serving their country at the US embassy in Namibia. The journey includes a side-trip to South Africa, so I spent the last month or so reading up on the cultures of both countries. In addition to some rather academic reading, I opted for a lighter read and picked up a copy of Born a Crime by Trevor Noah, the host of The Daily Show. It is amazing. I expected 250 pages of humor, but Noah surprises and brings more than the laughs. That dude has been through some serious stuff. He will make you laugh and he will make you cry. Give it a read and I promise you will never look at Noah as “just a funny guy” again.