The central bankers strike back.

Former chairman of the Federal Reserve Paul Volcker today pulled the rug from under the current direction of reregulation of our financial system, which he suggested was “papering over and tinkering around the edges of a broken system”.

In testimony to the US Congress, he took the argument that many of America’s (and indeed Britain’s) biggest financial institutions remained too big to fail.

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London, the very source of the credit storm, is an entirely appropriate host for the G20 jamborees.

This weekend it was the finance ministers and central bankers who whizzed through the City and the Treasury. I wonder if any of their chauffeurs took a detour past the offices of AIG-FP in Mayfair, home to what was, on a per worker basis, the most lucrative financial enitity in the world, which was being regulated by basically nobody.

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Size does matter to the G20 finance ministers. We know this in relation to the extent of the recovery. Some feel recovery has bedded down sufficiently to allow talk of ‘exit strategies’ from the extraordinary stimulus seen around the world.

Others, including the chancellor, fear that “the biggest single risk to recovery is that people think the job is done“.

We also know that quantum matters in relation to our banks, because almost a year ago in Washington, an unprecedented meeting of 20 world leaders decided that 30 of the world’s largest financial institutions would not be allowed to fail. read more

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By the time you are reading this I hope to be supping on mozzarella di bufala in a medieval Italian hilltop town full of churches stuffed with paintings by Renaissance masters.

The reality will probably be that I shall be going through umpteen security scanners along with some 3000 other journalists queuing for the G8 summit in the earthquake zone of L’Aquila, and helping our cameraman in my own puny way to lug camera and editing gear past Italian police in the summer heat.

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A balmy bank holiday weekend for sailing.

Despite the fact that my cousin Peter Snow has had a boat ever since I can remember, I don’t set sail with him enough.

This weekend reminded me of both the joys and perils of sailing. A thousand sails swept along the Solent in brisk winds. Within hours of being aboard I heard my first ever “May Day mayday” on channel 73 on the VHF radio.

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You may have found the past few days of revelations concerning the inner workings of Downing Street, a heartbeat from the prime minister, hard to credit.

But how about this? On the day the G20 summit met in London’s Docklands, we asked people – mainly via Twitter - to keep an eye open for anyone out there possibly using the event (in the words of sacked official Jo Moore) as a “good day to bury bad news”.

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A selection of newspaper front pages from G20 countries on the day after the London summit. Barack Obama is a prominent theme. read more

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Watch out for my colleague Alex Thomson’s report tonight on how the much-hyped G20 protests, policed at a cost of millions, were today dominated by a few hundred Somalis, Ethiopians and Eritreans, which was not what much of the media, on hand in case of a scuffle, had in mind.

They were protesting about human rights abuses pepetrated by the government of Meles Zenawi, Ethiopia’s Prime Minister, interviewed by this programme yesterday (see interview below). read more

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