Glass-Steagall - an idea whose time has come (again)?

When the G20 leaders meet in London next week, a key item on the agenda will be how to reform worldwide regulation of the banking industry. They could do worse than take a look at the Glass-Steagall Act of 1933 (USA).
GSA was enacted in the aftermath of the Stock Market Crash of 1929 to separate commercial from investment banking activities. At the time it was thought that "improper banking activity, or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash" http://www.investopedia.com/articles/03/071603.asp
Sound familiar?
Commercial banks chafed at these restrictions, and with their eyes on the rich profits of their investment banking cousins eventually secured the repeal of the Act in 1999.
The basic principle for reforming regulation of the financial services/banking industries should be this: if the institution provides such services (i.e. taking deposits and making loans) and is of such a size that it can not be allowed to fail, then it should be tightly and boringly regulated as a commercial bank. Financial institutions which offer riskier products and services should be more lightly regulated, provided that it is made absolutely clear that they will not under any circumstances be rescued from the public purse. The principal regulation over these institutions, investment banks, should be a limit on their size (so that they do not become "too big to fail")

It's time to increase interest rates

Continuing to reduce interest rates below around 3%, as the Bank of England has done in a frantic effort to boost the economy, won't work. The net borrowers are hardly affected; if they feel any benefit at all through reduced mortgage payments it is marginal - far outweighed by the fear of losing their jobs and so not being able to make the payment at all. The net savers tend to react by saving more, especially as pensions have been so badly hit by falls in the markets. This was exactly the problem faced by Japan in the 90's. So maybe it's time to try something counter-intuitive (from an economist's point of view) and increase interest rates?

Tony Blair visits the Gaza Strip - finally

We heard recently that Tony Blair, Special Envoy for the Middle East Quartet, has visited the Gaza Strip - two years after his appointment to the role.

http://news.yahoo.com/s/afp/20090301/wl_afp/mideastconflictgazablair

What has he been doing all this time? Wouldn't you think that someone who holds this position should have at least shown his face in Gaza before now? I suppose he had to rush there to get in before Hilary Clinton's visit...

It has also recently been announced that he is to be one of three recipients of the Dan David Prize for 2009, awarded by Tel Aviv University, worth $1 million. The prize was awarded in recognition of "his exceptional leadership and steadfast determination in helping to engineer agreements and forge lasting solutions to areas in conflict".

http://http://www.haaretz.com/hasen/spages/1064798.html

Is it possible that the Spinmeister has actually been working diligently behind the scenes and out of the limelight for the greater good of the Middle Eastern peace process all this time? But shouldn't someone in this position be impartial? How does this square with accepting a prestigious award from one side?

If the Government keeps lecturing us, we'll tune out the good stuff

On returning from living in the USA for many years it is hard not to be struck by the excessive intrusion of the Government into our daily lives. One example is the "public service" ads which run on radio and television, lecturing us on the dangers of smoking, drinking, driving without a seatbelt or how to be responsible parents etc. They make me sick.
However...I recently saw one on TV that was breathtaking in its effectiveness and simplicity. It was the NHS ad for F.A.S.T. - how to recognize the signs of stroke and what to do. Several years ago I received an e-mail passed on by a friend with similar information. I saved it just in case, but I would not have been able to tell you what it said. Now I can.

http://www.nhs.uk/actfast/Pages/recognise.aspx