What Is To Be Done? - A Prologue

A very good friend of mine, Pliny the Younger, wrote me after my last posting:

“This is all very good, entertaining reading. I enjoyed this last one particularly. I know no one would question your authority on the fact that things have been handled incorrectly. But, and there is a but, Can't you be more constructive?

I suggest this as your friend. I respect you too much and I know you have too many great solutions inside you to risk becoming labelled as someone who only sees the problems. What about proposing and lobbying for a particular solution to these issues? What should the FSA, Treasury, BoE, CEBS, European Commission, SEC, etc., actually do differently (rather than 'have done differently'?) After all, they seem to need some fresh ideas!

Someone once told me that the safest car to drive would be one with a large steel spike protruding from steering column towards the driver's chest. Not sure what the banking equivalent of that would be, but whilst it would be safe no one would want one.”

Pliny’s point was not only heart-felt (it was he who said, “It is difficult to retain what you have learned unless you practice it” *), it was also very timely. I received his note whilst I was in the midst of researching the next several postings in which I will lay out my suggestions as to how the banks, their depositors and borrowers, their regulators, the markets, etc., indeed all of us, can benefit from the crisis we are now experiencing.

Whilst I have made it a point, from the very first posting, of staking out the role of being a Socratic “gadfly,” I, too, had come to the conclusion that I needed to offer alternatives, not just point out deficiencies. Unlike Pliny, I am not so sure that my solutions are all that “fresh” or that they will fall any more kindly on the ears of some than has my criticism, but nonetheless I will give it a serious effort.

My first foray into the role of advocate follows.


Cassandra

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* Difficile est tenere quae acceperis nisi exerceas.