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LibDem Conference blog: Bowles warns of a “crisis of capitalism”

Monday 14:30: Dressed in a stunning satin burgundy hued power suit, hands glistening with sparkly jewels, MEP Sharon Bowles did not look like a messenger of doom. But at a TheCityUK fringe last night Bowles message was not a happy one.

Addressing the crowd of gathered financial industry representatives she admitted that Europe would not meet the G20 deadlines for financial regulatory change. More alarmingly she predicted the next crisis would be most likely be caused by the very changes being devised at the moment.

It is fast dawning on policymakers and regulators alike across the EU that they’ve really little idea of what the resulting interplay of new regulations will be; from capital ratio requirements, to PRIPs and EMIR amongst the raft of fixes which politicians are committed to.

In truth only time will show us if we’re witnessing what Bowles termed a “crisis of capitalism” akin to that of the planned economies of the former USSR…

Cameron Penny from Cicero Consulting

Sunday 17:30: There was something slightly Caesarean about Sharon Bowles’ arrival at conference. She’s but an MEP – albeit chair of the powerful ECON Committee – but she has been voted one of the most powerful women in finance, breezing past the Chancellor of the Exchequer and the governor of the Bank of England, let alone her fellow Liberal Democrats. People – rightly so – listen to what she has to say.

It is interesting, then, that in a fringe on the eurozone crisis Sharon came out against the financial transaction tax, suggesting that it was a false panacea being pushed by countries that did not want to face the bigger issues. She hinted that the Continent might be less enamoured with the concept if the British were more vocal about where the revenues would end up; since most of the tax would be paid by London surely that’s where the money should go?

What was more interesting about her comments, however, was the suggestion that eurosceptic Tories are helping the cause of FTT proponents in Europe.

She suggested that the machinations of this cabal were undermining Britain’s hand in Europe. Their desire to leverage the eurozone crisis has not gone unnoticed in the halls of Parliament or the corridors of the Commission and was making negotiations around financial services less amenable to the British position. It would be a very bitter irony indeed if arch eurosceptics ended up being the knights in shining armour for the financial transaction tax.

Benjamin Norman from Cicero Consulting

Sunday 16:20: Another year, another set of ’get tough’ on tax messages to start a Lib Dem conference.

Today’s centrepiece speech by Treasury chief secretary Danny Alexander was all about giving Lib Dem activists some “yellow meat” to savour.And after losing 700 local government seats and an AV referendum they needed it.

But with one or two heckles in the hall – there remain signs that those Lib Dems ’not’ in Government would like to push the Tories harder on policy and – indeed – have an economic Plan B.

To tide them over Danny Alexander opened up the prospect of Government stimulus to infrastructure capital spending. Perhaps he hopes the fund management industry will match this commitment with investment of its own. And perhaps the industry should step up here.

Alexander’s move is designed to bring a little confidence to badly shattered nerves – both at Lib Dem conference and in the wider economy.

And we all need a little confidence right now.

Iain Anderson from Cicero Consulting

Saturday 18:30: You’d think that someone did not want us to attend the Ministerial Question time with Vince Cable, as it was fairly well hidden. Not only was it relegated to a half side on page 70 of the conference directory, but it took place in a windowless dungeon in the depths of the ICC. This might help to explain why an event that was billed as “very popular” only managed to fill about 1/3 of the aforementioned bastille.

Anyone hoping for some fireworks – either from grass root LibDems or from Vince himself – over the Independent Commission on Banking Report left disappointed. Cable praised the report, and criticism was muted.

However, when asked whether he supported more “radical” proposals for reform – including proposals from the group “positive money” – he agreed, and said that the Liberal Democrats would have a big role to play. Perhaps it’s time to start preparing to see labels such as “toxic derivatives savings account” on our financial products…..

Benjamin Norman from Cicero Consulting

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