Criticism, audited

I welcome Mario Cientanni's support for our proposals to increase audit exemptions [Red tape around audit is proving hard to untangle, yesterday]. I don't agree that banks will continue to require audits as a condition of borrowing, and the British Bankers Association backs this up.

We realise that not all companies will wish to provide the parent guarantees required by EU law in order for their subsidiaries to obtain an exemption, but our informal discussions with business revealed that many would indeed welcome this flexibility.

I firmly believe that removing these regulatory burdens will give UK SMEs more freedom to innovate and grow, and help put our economy on the path to long-term, sustainable growth.

Edward Davey, minister for employment relations, consumer and postal affairs, Department for Business, Innovation and Skills


Insightful equities

Allister Heath suggests that the recent equity rally was short-sighted. But when liquidity threatens to dry up (usually thanks to the real short-sighted idiots, politicians and regulators) equities suffer as they are tapped for liquidity. Equity markets were low on justifiable fears of liquidity-driven redemptions and forced selling. Moves by the central banks helped reduce that risk so they were re-priced accordingly.

Mark Tinker, Axa