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Do not let Russia `Finlandise' western Europe

When I first published The New Cold War last February, many contested my title. But what once seemed eccentric now looks mainstream. Relations between the west and Russia have entered a period of extraordinary mistrust and mutual disdain. Indeed, after the conflict in Georgia, the description "cold war" risks looking like an understatement. Russia has shown that it is prepared to use military force against another country; the west has shown that it will not fight and will merely respond with a token protest. Some in the European Union, such as Nicolas Sarkozy, president of France, may see the Kremlin-dictated truce that stopped the fighting (though not the ethnic cleansing, which continues apace) as a triumph. From Russia's point of view, the lesson of the Georgian adventure is simple: we got away with it.

Interestingly enough, his conclusions make sense (if you just ignore that he only wants to apply them to Russian bankers...


The same goes for bankers. If they conceal the beneficial ownership of these phoney companies they are an accomplice to theft. Perhaps one of the benefits of the credit crunch will be a more sceptical response to financiers who maintain that their critics are Luddites. The west has done well to impede the crudest kind of money-laundering. It is no longer possible to turn up at an Austrian bank with a suitcase full of cash, open an account, and make some transfers. We should apply the same principle to asset-laundering: using western capital markets to sell shares and bonds in phoney companies.

(...)

We need to hurry. It will not be too long before financial centres such as Dubai, Shanghai and Mumbai are competing so effectively with London that clients that we find too dodgy will go elsewhere. What our financial centres sell, above all, is respectability. We have priced it too cheaply in the past few years. It is time to be choosier, while we still have some left in stock.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Oct 9th, 2008 at 03:26:53 AM EST
[ Parent ]
It will not be too long before financial centres such as Dubai, Shanghai and Mumbai are competing so effectively with London that clients that we find too dodgy will go elsewhere. What our financial centres sell, above all, is respectability.

Interesting. I heard that London's costs were higher than NYC's because our reputation for dealing in dodgy money and stock made the back office securities and insurance rates more expensive. So people preferred to trade in NYC if they had clean stuff cos it was cheaper, but traded in London if it was a bit "spotty".

So Dubain etc will be expensive if they trade in bad stuff.

Leastways that's what I understood.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Thu Oct 9th, 2008 at 08:42:58 AM EST
[ Parent ]

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