Financial actors serving the common good

Abstract

Posing the topic: “Financial actors serving the common good” today, is directly related to the lessons we draw from the recent financial crisis. To review the case I understand two points need to be addressed briefly: on one hand, a diagnosis of the crisis, and on the other, the proposal for an efficient and resilient financial sector that follows from that view. Concerning the diagnosis, I agree with those who affirm that the crisis was originated by an excess of savings formed in financial markets for various reasons. This excessive volume of savings caused mal-investment, and evolved in accordance to the pattern of what we can call a “speculative bubble”, which is not such an infrequent phenomenon in the functioning logic of capital markets. I think that the world economy during the 90s and 2000s has been characterized by an immoderate optimism regarding the potential self-regulation of capital markets. This situation was based on two elements: on one hand by the technological revolution that provided powerful new tools, and on the other, by a consensus in economic theory and policy which led to financial deregulation and gave excessive operating margins without adequate supervision...