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The Big Interview: Sharon Bowles, Arlene McCarthy and Vicky Ford

Wednesday 28 April 2010 - by Nicola York


“It is about keeping that balance. What we know is that financial markets, be they banks or other financial institutions, are very quick to react to any issues and arbitrage between different markets. And if you as legislators create the opportunity to arbitrage you should not be surprised if the arbitrage then occurs.”

She acknowledges that there is a risk that the longer conversations on legislation get drawn out, the more the momentum to change the regulation is lost. The European system of supervision is one such example where this is in danger of happening, according to Ford.

“To get the new European system of supervision working we need to make sure that Parliament comes up with a system and that the member states come up with a system that they are also prepared to agree to. If you see the two of those diverging in their vision, it is going to make actually getting agreement much more difficult and could mean you lose momentum on the whole.

“And that is important because what the supervisory system does is it allows you to share information about cross-border institutions, which was a key problem when things started going wrong. We realised that regulators hadn’t worked closely enough together across markets and so you know we want to see that up and ruuning. It may not be perfect on the first design you come up with but you’ve got to start moving.”


She is very passionate about getting universal accounting standards in place because not being able to agree what different companies are worth leads to uncertainty.

“If you look at Deutsche Bank’s balance sheet, if you value that in the US, you are talking about a number in the order of 800bn of assets. If you value that under international accounting standards, you are talking about roughly double the value. It is just completely unacceptable that we don’t find a solution to this.

“It’s a very complicated issue but to me it is also the absolute basics. How do you walk into a bank and think my money is safe here, if there’s such uncertainty about what the bank is actually worth?”


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