February 06, 2015

A “lack of accountability” worthy of the Guinness Book of Records

Sir, Louis Brennan refers to Peter Doyle's letter highlighting the “unprecedented scale” of the IMF’s forecasting error in relation to its 2010 programme for Greece, in order to argue for “reform of institutions such as the IMF and the ECBm so that an ethos of transparency and accountability obtains in their operations and decision-making.”

Though forecasting errors are usually seen in the rear window, and though IMF sits in the uncomfortable position of at times influencing so much so as to make their forecasts come true, damn if you’re right, damn if you’re wrong, no one can deny Brennan has a valid point.

But, in terms of lack of accountability, that is really peccata minuta when compared to that of the Basel Committee’s. Let me just describe it this way. Neither Hollywood nor Bollywood would ever dream of placing the responsibility for the production of a Basel III, in the same hands of those who produced that incredible box-office flop that was Basel II.

But there they are, with some of their players, like Mario Draghi and Jaime Caruana, having even promoted. It should apply to the Guinness book of records.

PS. In the case of IMF, and as it there had a much more active role, I regard Argentina as a much worse mistake than Greece