Slapping the little guys back into line
After watching the banksters swagger around, looting and pillaging, for over a generation, I have pretty much decided that the most we can hope to achieve in controlling these criminals is serious regulation. I still applaud the wag who suggested that "the regulation of the financial services business should be so comprehensive and strict, the head of Goldman Sachs would have to get a hall pass from Marcy Kaptur to take a dump." But in reality, I would settle for financial services being treated like a regulated utility.
But look what happened to Hungary when she attempted to put some restrictions on the "sacred" independence of the central bank. The EU has stepped in to explain how her government will be allowed to run. Actually, the restrictions Hungary wanted impose are very reasonable—which pretty much means my reform wish list will never happen. (sigh) I especially liked the part where central bankers were required to swear a loyalty oath to the country. Imagine asking a central banker to place the well-being of his country above the institutional needs of the central bank. (the horror) Gotta bring the big guns down on that! (cross posted at real economics)
EU Takes Legal Action Against Hungary
The European Commission has launched legal proceedings against Hungary, accusing it of breaching EU treaties with laws that undermine the independence of the justice system and central bank. The case could delay the payment of international aid needed to shore up Hungary's economy.
The European Commission said on Tuesday it was launching legal action against Hungary for violating EU laws with new legislation that curbs the independence of the national central bank, the data protection agency and the judiciary.
Legal proceedings against a member state's laws are rare in the EU, and the Commission's move reflects mounting international concern at the authoritarian policies of the right-wing government of Prime Minister Viktor Orbán, and could delay negotiations on an international aid package for Hungary.
"We had hoped that Hungary would have made the necessary changes. This has not been the case so far," said Commission President Jose Manuel Barroso.
Hungary has introduced legislation permitting a cabinet minister to participate in meetings of the central bank's monetary council, requiring the council to send the government the agenda of its meetings in advance, and forcing the central bank governor and council members to take an oath of loyalty to the country.
The government has also lowered the retirement age of judges to 62 from 70, in addition to making other changes to the organization of courts. The move has raised suspicions that the government wants to get rid of troublesome judges and state prosecutors. more