First published: the guardian.com, 8/01/2015
New rules and regulations are not enough to create a sustainable financial system
Sustainable finance may have soft edges – finance initiatives to support a clean environment, community development, small-scale business enterprises – but the hard core is about financial institutions that are safe, stable and don’t expose taxpayers to a recurrence of the great financial crisis of 2008–09.
Six years on, we have made some progress, but the financial system remains fragile, and in some respects unreformed.
Perhaps we should be more realistic and accept that recurring financial crises go back a long time. The economist J K Galbraith judged that they occur because, in every generation, the specious association is made between money and intelligence.
He observed that history counts for little in the finance world, and that “past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.” This is a wonderful description of finance in the 2000s, and still today…“more:”