Following President Obama’s ‘$30 Billion speech’ on financial regulatory reform and the thousands of pages of documents issued by the alphabet soup of international and UK regulators, just what is the state of play with financial regulation?

Matt Salisbury and Benny Spooner outline as briefly as possible two different streams of change – the largely agreed measures already being put into practice and the issues still in debate at the theoretical level.  On the latter, President Obama certainly laid down a marker for the rest of the world with his new ‘Volcker Rule’ announced on 21st January, but it remains by no means clear what approach will be taken in the UK. 

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In early January the Lords held a debate into obesity. During the debate Earl Howe, Conservative Health Spokesman in the Lords, praised our work for the Advertising Association's Food Advertising Unit (FAU):

“The Minister may be aware of some research published recently by Volterra, which accounted for the rising obesity over recent years by reference to the phenomenon of peer acceptance...Volterra does not claim that that is the only factor that accounts for the rise in obesity - far from it - but it is certainly one that ought not to be ignored in any study of the subject. That takes us into an interesting realm: the psychology of human behaviour and the way in which societal norms are created and maintained. Those are difficult subjects for policy-makers, but ones that must be grappled with.”

The full Volterra report is not publicly available yet, but please email Greg Wiltshire to receive a copy when it is published.

Important consultations are taking place as part of the ongoing reform to strengthen the financial system.  A crucial part of any new system is the ability of the financial sector to insulate itself from recessions.  The current FSA consultation on capital planning buffers focuses on how the financial sector goes about building up capital during good times and using it during bad. 

There are important issues to be decided; Volterra believes that the use of capital planning buffers is essential, but that the way they are communicated to the market will be crucial. 

Read our response here…

Paul took part in a debate at the London School of Economics on 'What economists should be taught', on 20 January.

He argued that much of the work of the Nobel prize winners in the 21st century, awarded mainly for what they did in the late 20th century, forms the basis for an approach to economics which is radically different from that in the current textbooks.

Here is his initial 12 minute presentation.