It seems I am spending a fair amount of time and column
inches currently discussing what I consider to be the strange actions of
various regulatory authorities.
A short while ago I wrote about how two regulators were bringing legal
actions against market participants on what looked to me to be fairly weak
grounds and just this week my column was discussing the regulatory dysfunction
around the swaps margin rules.
Today? Here we go again, as I have to ask what was the Federal Reserve thinking?
I don’t think many people were surprised that someone who
was named as a member of the now notorious Cartel was banned and fined by the
Fed, but there were more than a few eyebrows raised at the timing of the
The surprise stems from the fact that it is only a few short
weeks since the person in question – ex-Barclays’ trader Chris Ashton – had his
unfair dismissal case heard.
It could be the Fed knows the outcome of that hearing, but I
suspect a decision hasn’t been made yet, so is it stepping onto legal thin ice?
I have to confess I don’t know the ins and outs of
cross-border law because, with all due disrespect to the legal profession, I’m
a human! But it does seem strange to me that an authority in one country will
effectively find a person guilty after an investigation, while that person’s
claim of innocence (which included a claim he raised the issue to management)
is still under consideration in a court of law elsewhere. It seems to me to be
another example of the “guilty until proven innocent” approach taken by too
One could also ask if the evidence cited by the Fed was part
of Barclays’ defense against the Ashton’s claim? To my knowledge it wasn’t.
This all adds to the strange and eerie world in which
financial markets currently exist. One in which the regulators can’t get their
act together; go off on strange crusades that they may not win, while apparently
ignoring the people they are meant to be protecting in the first place; and
randomly throw out judgements without thought for events elsewhere.
I know everyone has to have a process, and equally I know
the political trend around the world is anti-establishment, and by association
anti-globalisation, but really: can’t someone just pick up the phone and say “we
were thinking of doing this, does this affect anything in your world?” just
The end result is confusion and something approaching fear
on the part of participants. The relevant authorities can help ease this strain
– and into the bargain help financial markets function efficiently again – by getting
their act together. It’s not asking much…actually it seems it is.