for certain US banks, and had the experience of large bank balance
sheet management that I have had, you would have to conclude that
there is one way to improve the transparency of the banking systems
worldwide and and the same time help prevent a future crisis.
The answer is simply that of updating the reporting of banks to their
central authorities so that it can begin to meet the challenges of the
information age.
At the very least this is to enforce with huge penalties for none
compliance a daily business reporting system of the banks balance
sheets. At Barclays in 1978 the whole balance sheet was managed on a
daily basis. It is simple! In an information age it is a no brainer!
Second, is the enforcement of liquidity and capitalization
requirements on a daily basis. This is also very easy to achieve.
Third is the regulation of maturity mismatch on a daily basis!
Fourth iis the raising of precautionary deposit balances with central
authorities.
Fifth is the limitation of borrowed funds for acquisitions. Control
of the financing of acquisitions to profit earnings would reduce the
merger mania.
Sixth is the international taxation of salaries of executives based on
moving five year averages for the industry and geometric profit
performance measures.
Seventh is measures of deviation from best practice published daily.
As always, the issues are not confined to any single view of markets
and a further list of measures will be forthcoming!