A modest proposal ...

Writing in today's Guardian, Richard Murphy and John Christensen argue that location of special investment vehicles in tax havens was one of the conditions leading to the present crisis and that global regulation is needed to cover the operations of tax havens. Not all of these are offshore. London is one of them.

[My title is taken from a notorious article by Jonathan Swift from 1729 proposing the eating of babies as a solution to an Irish famine. Swift was, of course, being satirical. It is likely that many in the financial community will regard Murphy and Christensen's proposal as equally outrageous, but at the time of writing the FTSE is off another 5% and less self-interested people may be beginning to realise that a root and branch rethinking of financial regulation is necessary.]

Shoulder to shoulder for marking to market

The accounting standard setters and the firms of accountants are becoming increasingly clamorous in their defence of marking to market. One of the latest examples is Ian Powell's letter in today's FT. Mr Powell wants transparency - but one can have transparency with footnote disclosures. Marking to market caused the problem on the way up when it was used for calculating profits and bonuses and it is doing damage on the way down as it takes away from balance sheets what it previously added.

Call me an old cynic, but there are going to many law cases in the wake of the crunch; anybody solvent who had anything to do with it is going to be sued. Suspending marking to market might just be an admission that the policy sanctioned by the firms and standard setters was not such a good one.