Just as natural science developed out of a natural philosophy we are hopefully moving toward a science of regulation, both in the sense of being well-established knowledge and drawing on political science and quantitative economics.
The world’s financial infrastructure remains in flux. The United States’ FATCA, Britain’s “son of FATCA,” France’s “mini-FATCA,” the dozens of intergovernmental agreements (IGAs) being entered into by governments around the world with the U.S., and calls by many EU member states for IGA-like agreements of their own are changing the rules of international financial transactions.
Warren Buffett famously explained to his shareholders in 2004 that investors “should try to be fearful when others are greedy and greedy when others are fearful".
At age 19 there was no doubt in my mind that I did not want a career in criminal law. I chose the much more objective (and enjoyable) commercial law. So much for that!
The apocryphal Chinese proverb, “May you live in an interesting age”, describes the current international financial environment – from the US FATCA to the various “me too” versions being hastily put forward by European governments, the world’s financial plumbing is being reworked.
An explosion of prosperity around the world has followed the increasing liberalisation (globalisation) of trade and investment.
The great curse of democracies is that eventually a majority of the people become addicted to and demand ever more government benefits that cannot be funded by the diminishing numbers of taxpayers or through borrowing.
In the early 1970s, there was no euro, Greece could print as many drachmas as it wanted, and the notion of a common European fiscal policy would have been dismissed as sheer fantasy by all but the most ardent proponents of a “United States of Europe”.
Consider the following recent comments by key regulators in the United Kingdom and the United States and a likely one from France:
The global debt crisis is leading to increased money chaos. Europe is in the worst shape, but the debt and money problems are to be found almost everywhere on the globe. As an economist who has often written about money, I feel a bit of embarrassment about how little progress we have made with “money”.