Yes, sure, it’s nice that the pinstripes in The City get to make money off servicing the financial needs of Johnny Foreigner. But that ain’t actually the point of the place at all. Therefore it’s nice seeing someone actually in that power structure pointing out that it ain’t:
Britain should abandon full access to EU financial markets if it means becoming a regulatory rule-taker, the Bank of England governor has said.
Quite so. We never do quite know what idiocy people like Sven Giegold (a German and Green MEP, one of those responsible for throwing some financial scraps Richard Murphy’s way) are going to come up with next. He is, for example, a ferocious supporter of a financial transactions tax. The major effect of which would be to make pensioners poorer. Having to put up with whatever stupidity such people will inflict upon European Union citizens is not the way to a better and more prosperous world.
However, Andrew Bailey said Brussels’ demand that the UK submit to its regulations was “problematic”, in the clearest sign since the agreement that the City will not receive the “equivalence” decision needed to trade in EU markets.
“If the price is too high then we can’t just go for it whatever,” he told the Treasury select committee. “I strongly recommend that we don’t become a rule-taker. If the price of that is no equivalence then I am afraid that will follow.”
Exactly and absolutely so.
There are benefits to following that EU rule book. That the pinstripes can continue to make money out of servicing J. Foreigners’ financial needs not just the most prominent but the only one. This does also carry with it the truth that this is of benefit to J. Foreigners, in that she gets her financial needs seen to. Good and hard Fnarr, Fnarr.
But there’s a price that comes with this. Which is putting up with whatever idiocy Sven decides to impose next. And at some point that price becomes too high. Like any other set of costs and benefits there’s a tipping point from “yes, why not?” to “here’s that Anglo Saxon Wave you’ve been itching for”.
The thing that needs to be understood, the thing that isn’t well enough understood, is that the benefits of the rule adherence flow to those foreigners, who J. though they are get their needs seen to, and the pinstripes who make their profit. The costs fall upon us users of the domestic financial system that has to follow the barking excrescences of the German, Green, MEP. There will therefore always be that imbalance, where the concentrated interest looking for the profits insists that we should ignore those costs imposed upon us.
That is, the political impetus will always be to too much conformity with EU rules. The actual correct answer is that we do stuff as we wish to do it. If they then desire to buy what we produce well, good. But we shouldn’t be doing what we don;t want to do so that they will buy – especially if the costs fall upon those who aren’t making the profits from the system.