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16 |

July 1 - 7, 2009


Irwin Stelzer

Afunny thing happened on the way to the reform of Britain’s financial sector. Several funny things, in fact. While policy-makers were deciding how to limit bankers’ bonuses, Goldman Sachs announced record payouts to partners and staff. While the Treasury was worrying about the viability of the nation’s banks, those banks began recording substantial profits, raising capital, and planning to pay back the bail-out money that had saved them from ruin only a short while ago.

Markets just seem to move faster than ministers – and often in a different direction.

Even funnier is the dispute over just how to reform and restructure the financial sector. Last week, the Prime Minister returned from an EU summit, having denied the Europeans the right to determine which financial institutions he, or his successors, would have to bail out in the future.

Or so he says, and may even believe. In fact, France’s Nicolas Sarkozy was closer to the truth when he proclaimed that “AngloSaxon” capitalism had been altered by the establishment of new pan-European regulatory bodies. Prepare yourself for the European Banking Authority; the European Insurance and Occupational Pensions Authority; the European Securities and Markets Authority; the European Systemic Risks Councils.

These new agencies will not only provide jobs for the boys: they have binding powers to investigate and oversee cross-border banking, insurance, pensions and securities, and can issue orders to resolve disputes between member states.

Sarkozy has only scorn for Gordon Brown’s claim that these bodies have very limited power. “We have agreed a European system of supervision with binding powers. My conviction is that its scope will increase.”

History is on the French president’s side – efforts to hold EU institutions to their original remits have uniformly failed.

Perhaps the funniest thing

of all, however, is the demolition of the stillChancellor by the Governor of the Bank of England.

Alistair Darling sees the problem primarily as one involving the creation of a new organisation chart – this chore gets moved over to the FSA, that chore deposited somewhere else. But the structure of the financial services sector is to remain virtually unchanged. The theory is that if he can get the regulatory organisation right, armies of regulators will, by sheer weight of numbers and regulatory edict, defeat the fleet-of-foot entrepreneurs and innovators who populate the Square Mile.

Mervyn King knows better. If you allow plain vanilla banks that take deposits and lend money to continue to participate in riskier investment banking, backed by the knowledge that if things go pear-shaped a government bail-out will be available, there is virtually no limit to the risks bankers will take. Heads they get the

profits, tails the taxpayers pay for the losses.

King hasn’t quite brought himself to mention GlassSteagall, the US statute that separated commercial from investment banking before it was repealed, but that is where he is heading.

King also exploited a problem that confronts Darling, in the process taking revenge on the Prime Minister who left the Governor swinging in the wind while dithering over his reappointment.

Darling knows that spending at current levels will bring inflation, a falling pound, rising interest rates, the loss of Britain’s AAA bond rating, and a return visit from the IMF. But his boss refuses to countenance “Tory cuts”, and vows to continue increasing the rate of “investment” – Brownspeak for “spending”. King made it clear that the Chancellor and the Prime Minister are so at odds that only the Governor of the Bank of England can put things right.


The Telegraph

Have your say Letters to the editor can be sent to T

Letters to the Editor

Digital doldrums SIR – In its apparently rushed statement on digital broadcasting, the Government appeared unaware of the problems that could be in store for the majority of radio listeners.

Digital Audio Broadcasting (DAB) services can – but often don’t – provide excellent quality reproduction, depending on the bandwidth used by the broadcaster. BBC Radio 3 and 4 can be superb when used with a properly set up antenna system. But poor antennae and less than satisfactory DAB transmission levels can cause real problems for the listener.

With FM, the listener rarely runs into insurmountable reception problems, even though the majority is using portable receivers with inadequate telescopic antennae. Occasionally, only mono reception is possible, but the programme can still be heard and, if the receiver is moved (perhaps to a window), reception can be perfectly adequate.

However, with digital, there is a delay of several seconds in decoding the signal. So the listener can find it extremely difficult to tune into a programme because the decoding delay could lead them to believe an otherwise suitable position for the set wasn’t suitable.

Basic AM radio may not be hi-tech, but it is reliable and is essential in cases of national emergency, due to its simplicity and the availability of easyto-use receivers. FM radio is also well suited to domestic use. On the other hand, DAB radio is not suited, in many cases, for use with portable radios, which the vast majority of listeners use. Dr Rob Mannion Editor, Practical Wireless Broadstone, Dorset

SIR – In deciding to switch off analogue radio, has the Government considered the number of radios that will then be useless?

We have 11: two radios, two alarmradios, two CD-player radios, one CD-player alarm radio, two tape-player radios, one tape and CD-player radio,


Fireside radio: George VI and Queen Elizabeth tuning in at Buckingham Palace, 1942

and one car radio. These will become useless.

We are encouraged to throw less away. Nationwide, there are likely to be two or three hundred million radios scrapped. How big a hole for landfill will be required when millions of the nation’s radios are scrapped? And how much extra landfill tax will have to be paid for the privilege ofthrowing them away? Rev Brian M Cave Nailsea, Somerset

MPs have learned nothing SIR – It is clear that our MPs have learnt nothing from the exposure of their abuses of the expenses system, as the election of John Bercow as the new Speaker has shown.

MPs had an opportunity to draw a line under the affair. Instead, they have chosen a man who wants to give MPs another huge pay rise, to £100,000 a year. Kevin Davidson-Hall London W1

SIR – I despair. In the election of Mr Bercow, there were MPs who still did not think of the people of this country.

They thought of scoring points against each other and settling old scores. Instead of voting for someone who could be welcomed wholeheartedly and trusted by the whole House, we have yet more controversy. Marilyn Imi Esher, Surrey

SIR – Talks of a Tory move to oust the new Speaker, should they win at the next election, are worrying.

The claim is that he has moved too far to the Left. Surely the Speaker has a politically neutral role and should, therefore, be afforded the respect of the whole House. Duncan Rayner Sunningdale, Berkshire

Redaction speaks louder SIR – Hands up all those who had never heard of redaction before the controversy about the publication of

Neil McCormick

Even at 50, Michael Jackson’s glory days were far behind him. He hadn’t made a record in eight years, and a really good one in 20. His life had become a weird, overwrought soap opera, and his health (physical and mental) was the subject of much speculation.

Yet anyone who grew up in the Eighties is perhaps wedded to a purer version of the singer: the one that conjured up a perfect storm of pop forces to create an album that established him as one of the all-time greats. In November 1982, Jackson released Thriller, a pop masterpiece that dominated the decade, gradually building a head of steam to become the bestselling album of all time. Thriller

was a record that crystalised so many diverse strands of pop that its range, sonic imagination and daring raised the benchmark for everybody, in a way not seen since the Beatles’ Sgt Pepper in 1967.

Drawing on Jackson’s facility for rhythm and melody, Thriller boldly blended the synthetic plasticity of white synth-pop, the swagger of heavy rock, and the syncopated propulsion of black rhythm and blues, at each point throwing musical curves with lush orchestrations, gospel choirs, flourishes of world music rhythms and the dazzling harmonic chordal structure of jazz.

Crucially, Jackson added a bold visual layer to the pop process with his instinctive command of the new medium of video.

Thriller was the album that could not be stopped. Over three years, seven of its nine tracks were released as singles, selling more than 20 million. Making

Michael Jackson’s Thriller went on to become the first million-selling music video. And Jackson himself went strutting through it all with a physical assuredness and sharp, finger-on-the

pulse wit almost completely at odds with his image of shyness and

neurosis. Before all the chaos and controversy, Thriller was his moment of pure pop perfection.

Of course, Jackson didn’t make Thriller on his own. Key collaborators included British keyboard player and songwriter Rod Temperton (who contributed three songs, including the title track) and legendary producer Quincy Jones. If there was a guiding principle, it was simply, according to Jackson, to create an album where “every song was a killer”.

Four of those songs were written by Jackson himself, and, apart from the rather saccharine duet with Paul McCartney, The Girl is Mine, they establish a mood of psychological