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It wasn't intended as such. Finance is a very important part of the economy and should be. I actually blame regulators for creating a false sense of security.
by grandalf 16y ago
It wasn't intended as such. Finance is a very important part of the economy and should be.
I actually blame regulators for creating a false sense of security. A more "wild west" environment would have at least led investors/counterparties to question more of the claims that were being made leading up to the crisis.
- Retric 16y agoThe root cause was and is the ability for people to gamble with other people’s money and only share in the upside. It promotes ever increasing levels of risk taking. Plenty of mid level people knew they were selling or buying crap but there was zero incentive for them to stop.
- grandalf 16y agoI see your point. I view that as a problem with the incentives firms gave their employees. However, think about the role of government incentives. It took decades of tax breaks and other stimuli to get the public to think that real estate prices "just go up" year after year. It was this massive blind spot about real-estate that was (I think) at the core of the failure of firms to appropriately manage systemic risk.