2021-11-03
The notion of learning from history is much supported in the word, but far less in the deed (especially if Climate Change predictions are anything to go by).
How many times following some government-inspired "learning opportunity" do we hear the mantra that "lessons will be learned" and how much confidence does this incantation instil within us?
The AIER (American Institute for Economic Research) publishes a note with regard to learning from the history of banking regulation in the states of America, which may be pertinent given the presumed likelihood that we will soon be on the receiving end of another global monetary reset and probably a much-revamped banking system.
The EU and its much-touted Basel II (or is it Basel III now? I've lost count) has promised that under these (ever more voluminous) new rules the banking system will become somehow very much safer and more functional than before, but I think that one lesson from history is certainly that the more complex the rule-book, the greater the scope for misunderstanding, obfuscation, and general mismanagement (not to mention the vast cost of having to employ numerous expensive expert advisers in order to carry on one's business whilst keeping, or appearing to keep, within the rules).
However, as the AIER points out, the problem is probably less to do with under-regulation than with centrally-imposed one-size-fits-all over-regulation that leaves no room for locally learning from regulatory mistakes, and locally applying the appropriate regulatory corrections. Worth reading.
Centralisation invariably seems to be a sure-fire recipe for inflexibility (ie: not learning from mistakes within any acceptable time-frame). Hence I suppose the need for the occasional global financial reset ...
