Darling declares war on City's risk culture

Via Samizdata, this:

The Chancellor pledged to clamp down on the City's culture of rewarding undue risk-taking and will soon reveal plans to tighten market regulations.

For fuck's sake. Meanwhile, in the real world:

The fact that insurance companies refused to insure property located on storm-wracked coasts is not an instance of market failure. A market failure supposedly occurs when the price of goods and services do not reflect the true costs of producing and consuming those goods and services. That's clearly not what happened here. The market is practically shouting at people, "Don't build something you can't afford to lose where hurricanes periodically crash ashore."

Instead the state "insurance" scheme is an example of government failure which occurs when a government intervention causes a more inefficient allocation of goods and resources than would occur without that intervention. In this case, it's the government that's telling people that it's OK to build in dangerous areas and then not charging them enough for the "insurance."

In what way does the cunt think that businesses are keen to fire up risky ventures? Businesses would rather have a sure thing any day of the week. All this fucking around with derivatives and the like stems from regulation stopping businesses from offloading their risk in a transparent manner, so they create new financial instruments that bundle up the risk in obscure and exciting ways and sell it off.

So what is old badger brows going to do? He's going to create more regulation, leading to even more complex derivatives, leading to more risk-hiding, leading to more speculation, leading to ...