PDF version Edition 2 - Fsa

74
prof. Dr. casper de vries is program Director
Risk Management at Duisenberg School of
finance.
www.dsf.nl
WHaT Will HappEN To HiGH fREqUENcy TRaDiNG
if a ToBiN Tax iS iNTRoDUcED, aND WHaT
aRE THE coNSEqUENcES foR THE NaTioNS iN-
TRoDUciNG (SUcH) a ToBiN Tax?
(RoGiER koUWENHovEN , vRiJE UNivERSiTEiT)
Of course a Tobin Tax will hamper high
frequency trading. It will have several
other negative implications. First of all,
it will have a negative signaling effect on
the market. Markets will become less informed.
A Tobin Tax causes a reduction
in transparency, which in turn results in
difficulties for the market to value assets.
Secondly, it raises the costs of our pensions
and insurance as these rely heavily
on trading financial products, often
used for hedging purposes.
DSF Expert column
FSA members are asked to direct their themed questions
to a DSF expert in every Fiducie publication.
Read what our expert has to say about the theme of
this issue.
stabiliZing the system:
in search for the weakest link
WHERE SHoUlD REvENUES GaiNED fRoM THE
ToBiN Tax BE USED foR?
(kaSpER faaS, vRiJE UNivERSiTEiT)
Collected taxes should generally be used
to increase the budget of the government
and not be allocated for specific
purposes.
aRE THE So callED BaRNiER pRopoSalS a coR-
REcT Way of ENSURiNG THE iNDEpENDENcE of
accoUNTaNTS oR aRE THE ExiSTiNG RUlES SUfficiENT?
(MaxiME ScHMiTT, vRiJE UNivERSiTEiT)
There currently is -and always will be- a
conflict of interests in the accountancy
sector. This conflict is simply inevitable.
At the moment, there already exists job
rotation within accountancy firms limiting
the accountants’ dependence. There
is a tradeoff between becoming better
informed if one is longer on a specific
job and being captured by the management
of the firm one is supposed to audit
critically.
To WHaT ExTENT Will THE ifRS STaNDaRDS iMpRovE
TRaNSpaRENcy aND REDUcE SySTEMic
RiSk?
(SJoERD kEilMaN, vRiJE UNivERSiTEiT)
Market based valuation gives better
information, but also requires better
interpretation by the user. The interpretation
has not kept up with the changes
in reporting. An example is the Dutch
pension system where liabilities are now
discounted by the market based swap
curve rather than the fixed 4% rate used
before. This causes daily fluctuations
in the solvency ratio of pension funds.
Given the long duration of pension
funds, one should then not immediately
act on these fluctuations. The opposite,
however, has happened by using the old
interpretation. With a fixed rate, high liabilities
would not disappear as interest
rates would move.
HoW SHoUlD coRpoRaTioNS coNTRol iNTER-
Nal fRaUD aND ExcESSivE RiSk?
(laURa DElacoURT, UNivERSiTy of aMSTERDaM)
In general, this is the role of the accountants.
They are responsible set up
controls and thereby prevent internal
fraud and excessive risk. Besides that,
corporations can alter the bonus structure
to prevent excessive risk taking.
Individual bonuses should be structured
as long-term compensation methods. In
the current situation, it is hard to judge
which results are the accomplishments
of specific individuals. In a longer time
frame this becomes easier to judge. It
will also prevent short term gambling.
coNSiDERiNG THE opTioN of EURoBoNDS, HoW
caN yoU GivE pooR pERfoRMiNG coUNTRiES
THE iNcENTivE NoT To BoRRoW aGaiNST availaBlE
cHEapER RaTES?
(MaRc TiMMERMaN, UNivERSiTy of aMSTERDaM)
Because the EU and euro is a treaty organization
of equals, the EU lacks the
hierarchical structure to discipline poor
performing countries. If the European
Union is structured like a federal government,
certain hierarchical levels would
be included. This way overconsumption
by poor performing countries could be
disciplined. In the current situation we
cannot prevent over-borrowing against
cheaper rates. For this reason, I believe
that until we would move to a federal
structure, where at the supra national
level an euro parliament and government
would be able to effectively control debt
sinners, we should not issue euro bonds.