Clear goals
[Dave Birch] I mentioned before that I happened to be at the recent Financial Services Club dinner with Charlie McCreavy, the EU Commissioner for the Internal Market and the man behind initiatives including MiFID, SEPA and the PSD. I can’t report what he said, because the dinner was under Chatham House rules and we were asked to seek permission to use any quotes, but what I will say is that it meant that I had the opportunity to think about the general direction of regulation since it’s likely that one of the outcomes of the current crisis in the financial sector will be more regulation of all financial services. If this is the case, I hope the regulation will have more concrete and explicit targets to that we can measure whether it is working or not. Suppose, to pick an obvious example, that the purpose of SEPA was to reduce the total social cost of payments in the eurozone from the current 0.5% to, say, 0.25% in a decade. Then we could decide for ourselves whether the costs incurred (which in this case are substantial) are, in the long run, justifiable. Not regulation for political purposes but regulation to increase the net welfare, which is how it should be.
