With reputations under attack again following revelations that a rogue trader had lost UBS $2bn, there will be increased calls for the splitting of banks’ functions. However, once again, behaviour appears to be at the root of the loss.
The public sector is gearing up to battle against the austerity measures but if George Osborne was in anyway tempted to stop them being implemented, we could end up with no money for the public sector and no kicks for free.
Inevitability when something happens there is a tendency to blame the system rather than the behaviour within the system. In their desperation to be seen as doing something, politicians – backed by hectoring calls from the media - ignore the obvious in favour of introducing more strict regulations or laws. The obvious being, what was the behaviour of the people involved?
The UK government has done a deal with Switzerland to get a modicum of income of those UK citizens who have private Swiss bank accounts. Some moan that it doesn’t go far enough, while others warn that account holders may switch territories. However, one thing people forget is that the tax-conditions in a country will dictate where the taxable money is.
A Franco-German summit has managed to scare the markets and the financials in particular by resurrecting the idea of a Robin Hood tax. Even ignoring the economic damage the introduction of this tax could do, what are the stakes for UK politicians and can they identify which route holds the greater risk?