More Complex Proposals To "Simplify" Saving

The Centre for Policy Studies is reported as saying today "long-term savings are overly complex, with multiple tax regimes that deters people from saving."

I agree.

As the report notes:

"The pension and savings industry has suffered a near fatal erosion of trust, fuelled by mis-selling scandals, excessive costs and a long period of poor investment returns. This has catalysed a regulatory backlash."

Then it goes way off the rails:

"The industry must now embrace the Retail Distribution Review and work collaboratively with the FSA to help it rebuild that trust. Only once this has been achieved could the industry credibly commence negotiations with the FSA to reduce the regulatory burden."

Why not start with the Treasury? The FSA is as much a victim of all the complexity as anyone else - check out the virtual swamp that is the FSA's "Money Made Clear" web site.

While the proposals to simplify financial regulation are proposed by reference to the current arbitrary product categories, mystifying jargon, pots and limits, the situation will only become worse.

Let's start with a clean slate that supports all the ways people want to use money.

For those with surplus money, we should aim to deliver diversification without the average person needing to understand more than the concept of not putting "all your eggs in one basket".

Ask yourself: why can't I put suitable financial services in a shopping cart, like I can buy other stuff?

Gone Phishing

Interesting report from All Spammed Up that the 'Avalanche' gang, based in Eastern Europe, was allegedly responsible for 75% of phishing in the second half of 2009.

The alleged 'Avalanche' modus operandi is to create forgeries of genuine, major web sites then send emails inviting customers to log-in. They're alleged to have cast their net about 84,000 times in the period, however, the 'uptime' of the bogus sites apparently declined.

Maybe they got bored. Or rich.

Meanwhile, the uptime for the other 28,000 alleged phishing expeditions increased, possibly reflecting the ever-expanding range of phishing methodologies.

The moral of the story? Don't bite: never log-in to a site that you didn't locate for yourself, and take care to read the full web address of the site you're about to log into.

Oh, and look out for "tabnabbing", whereby the phishermen re-direct one of your open browser tabs to a fake site - more a fish trap than your traditional bait-and-hook or net approach.

Image from Blog Inmobiliario de Bolsa Profesional Inmobiliaria

BP Spills Coffee

Hat-tip to BoingBoing

Phat Fees: A Regulatory Requirement

It will be fascinating to see what comes of the Office of Fair Trading investigation into fees charged by banks for underwriting share issues.

League tables via FTAlphaville demonstrate there's a lot at stake - although the OFT seems to think there's £2bn in fees as opposed to Reuters figure of £940m. So, right away it appears the OFT may be casting its net wider than the banks would like.

Will the result be the opening up of financial markets with simple financial products accessible to all, or will the regulatory framework continue to funnel all our major investment opportunities and investment funds into a killing zone reserved for a privileged few?

Place your bets now!

We're Going On A Bear Hunt

While the fiscal bears are rampaging across Europe, devouring costs wherever they can be found, the old bulls bellow that the planned austerity measures are dooming us to a vicious spiral of debt deflation:

"Leading the criticism is Nobel-winning economist Joseph Stiglitz, a former chief economist at the World Bank who now advises several governments and has warned against what he terms the "deficit fetishism" of the cost-cutters.

In an interview with French newspaper Le Monde this month, Stiglitz said that Europe "is facing disaster if it continues along this path.""

But disaster has already struck, let's face it. And the fiscal bulls borrowed and spent til there was no alternative but to reign in and restructure. With apologies to Michael Rosen:

We can’t go over it.

We can’t go under it.

We've gotta go through it!

Squelch, squelch, squelch

Image from Natureandkind.com