25/04/2015
The FUD continues unabated, as the
Guardian reports that HSBC, Britain's biggest bank, has issued "a stark warning about the economic risks of the UK pulling out of the European Union", citing the economic uncertainty created by the risk of the UK going alone.
The
Times is playing the same game, with scary headlines, proclaiming that HSBC has threatened "to quit City over fears UK could leave the EU". This comes as the bank has revealed it was threatening to move its headquarters out of London to another country, a threat that has not impressed Mark Gilbert of
Bloomberg.
Writes Gilbert, there's a saying used to call the bluff of someone who threatens to flounce out of the room during an argument: "Donât let the door hit your backside on the way out". That sums up, he says, how the UK should react to the bank's threat to move its headquarters to a different country.
The real issue, we also learn from Gilbert, is nothing to do with the EU, but the increased bank levy. And threatening to leave in a fit of pique every time there's a threat of increased regulation or a nudge in taxation smacks of teenagers threatening to run away from home because a curfew is too early or household chores are too tedious. HSBC is becoming a bore by regularly trying to blackmail the Treasury.
But, in terms of using blackmail, the
Guardian and other media outlets which are running the EU meme are every bit as guilty, exploiting public ignorance and fear to sell a false bill of goods.
The point that the likes of HSBC and their media fellow travellers choose to obscure is that the banking industry is global and so, increasingly, is its regulation. In fact, there has been what
has been described as a "Cambrian explosion" in international regulatory co-operation which has transformed the regulatory environment. This means that pulling out of "Europe" would not make any difference to the trading environment - power is no longer geo-located in Brussels (if it ever was).
Conveniently, the extent of this transformation has been charted by the
OECD and by
researcher from Arizona State University. And in their documents we see this helpful chart (below) which sets out the structure of global financial regulation.
Readers will observe the focal position of the
Financial Stability Board (FSB) and the remarkable number of organisations that make rules, set standards and co-ordinate regulation within this crucial field. But they will also note the relatively inconsequential position of the EU, which is a downstream organisation when it comes to framing regulation.
But this is all part of a much bigger picture, which goes under the classification
International Regulatory Co-operation (IRC), as charted by the OECD.
Not only has it recorded a staggering proliferation of organisations involved, the OECD, after an initiative
launched in 2010 has identified eleven "mechanisms" of IRC, ranging from the formal and comprehensive to the informal and partial.
These run to harmonisation through rule-making by supranational or joint institutions such as the EU, treaties between states, regulatory "umbrella" partnerships such as the Canada-US Regulatory Cooperation Council, and intergovernmental organisations such as the ILO, OECD and WTO.
The territory also includes regional agreements on regulation such as APEC and UNECE, mutual recognition agreements, transgovernmental networks such as the Basel Committee on Banking Supervision, national requirements to consider international standards, incorporation of international standards in national law, soft law instruments and dialogue/information exchange among regulators and stakeholders (see diagram below).
The UK government is
fully involved, as is the
US government, where IRC is subject to a Presidential Executive Order, with action directed through the
Office of Management and Budget. And it
drives trade relations between the US and Canada.
Yet, while writ of IRC is dominating the global regulatory environment, it is almost completely invisible to the media, to most politicians and commentators. This means that most of what we are told is superficial to the point of misleading. The way we are governed has undergone a revolution â an invisible revolution - and the media is not even close to putting us in the picture.
Instead, it gives succour to the propagandists, who would have it that the "Europe" of which they know so little is one which is essential to UK trade, unwilling or unable to recognise that, in this changing world, we can live without the political ambitions of the EU, and do better on the global stage, outside the EU.
The point they cannot seem to cope with is that globalisation has now advanced to such a stage that the original justification for having the EU running the European trading bloc has long since expired. "Europe" isn't working, and we need now to look for a new settlement, of which IRC is a major part.
But the media will never get close to explaining this. Their journalists do not have the intellectual architecture which enables them to understand what they are seeing, which leaves them fundamentally unable to report what is actually happening. The revolution to them will remain invisible, because they have no mechanisms with which to see the events around them.
