The BIS has published the proceedings of the IFC Conference on “Measuring financial innovation and its impact”, held in Basel, 26–27 August 2008. About 37 papers, complete file.
The conference closed with a panel discussion on data issues in the context of the financial turmoil, which had created significant uncertainty among market participants and policy makers. The panel was chaired by Jan Smets of the National Bank of Belgium and outgoing IFC chairman. He noted that various innovations such as new housing finance instruments, the use of special purpose vehicles, securitisation and derivatives, had played a key role in changing the economic and financial landscape before and during the turmoil, both individually and through a number of linkages amongst them. He referred to the background issue paper prepared by Paul Van den Bergh of the BIS that identified a number of possible
data issues in the context of the turmoil. The key question was whether better information, including statistics, might have helped authorities to anticipate potential problems and to navigate through the turmoil more easily. Looking forward, the issue was whether there were lessons for statisticians in terms of producing better information to avoid similar difficulties in the future.Mr Steven Keuning of the ECB noted that one of the main issues during the turmoil had been the lack of transparency, including with respect to a number of financial innovations. These could have been monitored more closely. At the same time, it had to be recognised that the problems did not originate from a lack of macro-economic or financial statistics. If micro-data are lacking, this cannot be remedied by any statistics. Besides, new data collections, including those to capture innovations, are costly and take time to implement. It is important that statisticians are proactive and try to anticipate the data needs in advance……
Common phrases used to white-wash corruption include “lack of transparency = hidden in darkness) and “new financial instruments, also called financial-innovations = fraudulent representations”
The regulators were bought. They allowed “financial innovation” (read crookery). New “financial instruments” and “derivatives” (read all too loosely defined ) were allowed to be white-washed and used for the sake of gaining new commissions on top of already multiplied commissions,….and all this on the back of already multiplied fiat “money” ie
the FRBS (Fed Reserve Banking System , see Creature from Jekyll Island) multiplies interest on money they don’t own, this is mathematically defined as infinite interest, but de-facto legalized. On top of interest, they multiply the fiat times 9, then their banks x5 or more, then further credit systems multiply the totals again, then Fannie Mae leverages those results up to another 100x as testified before congress, then AIG execs innovated new layers of insurance derivatives, Credit Default Swaps and others, with more multiplied commissions, and only the perpetrators know what other instruments circulated around the world, clear to China with multiplied leverages of money, all based on a false fiat debt system of the Creature From Jekyll Island. And the American people get held liable to pay all the profits put into the pockets of those criminally abusive finance-innovators (read “thieves in the night of darkenss without transparency), and the regulators protect themselves by failure to expose it all.
Just look at what congressman McDonald was doing prior to his plane being shot down, talking John Birch talk about the Creature from Jekyll Island. If you’re ignorant of what that is, buy the book. All that money disappeared into deep pockets, dark holes, and the American people get to pay for it all. Wow. What a deal. And who in our congress will stand up. I know a few who are. Ron Paul is one, and others are now joining his move to audit the FRBS as never before.
If American’s won’t take back control of their money, how can they expect anything else to be made right …
“During the general discussion it was noted that banking crises seem to have become more
widespread and regular. Was this the result of innovations which often resulted in a good
idea being overextended into inappropriate areas with negative consequences for financial
stability? Could statistics show where such overextensions occurred so that crises could be avoided? Could statistics measure innovations more pro-actively?”
These are good questions. I don’t think so, which is why I support Narrow Banking for a base system and taxes on bank size, for example. Except for Leverage and other basic metrics, what would you measure? Since Irving Fisher is the guiding light of this group, how about taking a fresh look at his views? Narrow Banking, Stamping, etc. Especially if more crises are coming our way regardless.