Thursday, February 26, 2009

City watchdog promises 'banking revolution'

Financial regulators may in the future ban financial products if they are too risky or too complex, Lord Turner, chairman of the Financial Services Authority, said today.

Read this article.
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3 comments:

Tan Kin Lian said...

If regulators had banned complex and risky products, we would have avoided the problem of the mini-bonds and other credit linked notes. These products would never pass the regulators.

Even though these products were not banned in UK, the investment banks did not sell them in the UK, as they would have been fined by the regulators for breach of the regulations.

The investment banks knew that they could get away in Singapore, Hong Kong and Taiwan, so they sold these products here.

February 26, 2009 5:24 PM
David said...

These products are actually meant for ultra rich folks or entities like GIC and sovereign wealth funds. If they are worth 10s or 100s of billions $, even losing 30 or 50% of it may not be a big deal. But if they gain, their wealth multiply equally fast.

Hence, these are not the ball game for retail folks. Some more capped the gain at 5% but can potentially lose all. Why on earth MAS can allow such products to be sold to the public? Are they ignorant? Or they knew but still allow which is even worse.

February 26, 2009 7:50 PM
zhummmeng said...

The watch dog must have teeth and on the prowl always and not on holidays.
This is what has happened here. The FIs and insurance companies can suka suka do what they like. Self regulation means no regulation for them. This is the culture in these companies. They can roll out dubious products and use the greedy agents to hoodwink the consumers.
Meek and innocent agents become garang and unscrupulous. They are taught the physcology of selling how how to pysco the customers into buying. They are taught how to act in role playing classes. With these skills and laced with high commission they are used to load the useless products on unwary and trusting consumers.
The sleeping regulator still continues to sleep with its head in the sand.

February 27, 2009 12:30 PM

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