The intriguing theme of this year’s ACT Annual Conference is: ‘If treasurers ruled the world.’ Some of you might think this is a slightly terrifying prospect (although potentially not as terrifying as if journalists ruled the world). Others might think that treasurers would bring some sanity into a world that, at times, feels like it’s going completely crazy.
One issue that treasurers tend to feel particularly strongly about is regulation. That’s because they are often the ones who have to make the grand ideas that filter down to us from the G20 work in practice. And some of them are very grand indeed, not to mention based on questionable logic. A case in point is the European Market Infrastructure Regulation – which generally goes by its snappier acronym of EMIR. Our guest columnist, Richard Raeburn, chair of the European Association of Corporate Treasurers, comments on this particular bugbear, on page 17.
I will say a word in defence of the regulators here – those of you who don’t want to hear them, please stop reading now: all the rules that are unleashed on us are done so with the best of intentions. The overall objective is to make the financial system safer so that governments don’t have to raid the pockets of innocent taxpayers (you and me, in other words) in order to rescue institutions that have been fundamentally mismanaged.
But while the intentions are good, the end results do seem rather baffling. We have banks that are cutting back on lending to small businesses, which are in desperate need of funding. We have countless derivative trades being reported, but uncertainty as to what regulators are actually going to do with all the information they get. And now we have the prospect of money market funds – many treasurers’ preferred option for stashing excess cash – potentially being regulated out of existence. We can only hope that Brussels will see sense before that happens, but it is essential that treasurers make their voices heard in the debate, as noted by Susan Hindle Barone, secretary general of the Institutional Money Market Funds Association, on page 38.
So what would a world that is ruled by treasurers look like? My guess is that it would be less regulated, more financially literate and I would find it a lot easier to make payments to my relatives in New Zealand than I do now. But I guess I will find out more at the conference this month. I look forward to seeing you there.