Tuesday, 15 September 2009

"No more laymen, brothers!"

One year on from the collapse of Lehman Brothers market watchers and political leaders alike are delighted that ordinary folk now understand collateralised debt obligations (CDOs) and other structured securities. There is a sense that, now that everybody understands the complexities of the market place, it is far less likely that maths geeks and rocket scientists will ever again be able secretly to develop and trade the toxic waste that brought down that financial behemoth.

It is widely accepted that banks will have to show greater accountability in the coming months and years. Congress is working through President Obama's overhaul of the regulatory system and in the UK, Gordon Brown is making noises about how cross he is that bankers are paying themselves large bonuses again. But the key to long term change in the running of the global financial system has inevitably to come from the ordinary voters, the taxpayers who will have to hold future political leaders to account, and through them, the banks as well. And for that to happen they have to be able to understand the nature of the products that those banks trade.

And so it is with this in mind that Prime Minister Brown has decided to authorise a new range of derivatives that mean something to ordinary people. He and Chancellor Darling will sign off the first wave of these in the coming months. They will include poker derivatives - after all everyone and his aunt does poker nowadays. They will also likely agree roulette derivatives - roulette being another hot home counties favorite; pawn shop derivatives - much in vogue nowadays, what with the recession; lottery derivatives - everyone loves a punt, and remember, it could be you; and, slightly more controversially, mortgaged-up-to-the-hilt derivatives - a personal favorite of the Prime Minister.

"Let me make myself clear: The era of bankers having all the best tunes is over." Said Gordon Brown today. "It is time for people to understand what many of us have understood for a long time: The financial markets are not going away. So if you cannot beat them you must indeed join them. And the best way to do that is for this government to spread plain, intelligible casino capitalism to the masses. So that is why I now offer you 'The People's Derivatives'."