“Clearly the Government needs to stop dithering and politicking in the face of this full-blown financial crisis and breakdown of regulatory framework. It needs to get bipartisan support and quickly set up an inquiry staffed with the best minds available and briefed on how to best handle the avalanche of collapses that is upon us. New laws, new regulators, new people and a new approach are required to meet the greatest challenge to the financial system since 1929.” Looks like Michael West thinks that more can be done.
In today’s SMH opinion he then goes on to state “ASIC and the ASX let these paper-shufflers and their fast imitators, Allco, MFS and Centro, get away with whatever they wanted in pursuit of their fast buck. They granted myriad waivers from normal disclosure and, even as financial stocks began to get the death wobbles, have refused to force them to produce management agreements over their satellite stocks.
In a study released in April last year, RiskMetrics found externally managed entities (satellite stocks such as Macquarie Airports, Macquarie Infrastructure Group and Babcock & Brown Infrastructure) accounted for 14.3% of waivers granted in the study period (July 2005 to December 2006).”
Regulation of critical lines of supply is a legitimate government function; it is recognised that in some cases individual corporations may be restricted in their practices; with a view that the greater community can have faith and confidence in the fundamental strength of our major institutions, in this case our money supply.
While clearly the US is facing a much bigger crisis than we are here in Australia, if we fail to take the lessons learned from the US experience and sure up our own regulatory processes we are clearly negligent.
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