Last week, during a piece I posted about Carswell and Baker's banking reform bill, I mentioned in passing that, due to changes in EU legislation, from January 2011, all deposits with banks across Europe will be guaranteed up to at least 100,000 Euros. Eight days later, the BBC has published the same facts as if they are breaking news.
As a example of the seeming inability of politicians to think in any kind of connected fashion, it's highly instructive. On one hand, we have EU politicians pushing out increased banking regulation and capital requirements in an attempt to increase prudence in the banking sector and reduce the likelihood of future losses being socialised, on the other hand, we have EU politicians pushing out increased depositor guarantees, which will reduce prudence in investment decisions and increase the likelihood of future losses being socialised.
The end result is two directives which grab headlines, increase bureaucracy, pull in opposite directions and ultimately, may well end up just cancelling each other out.