Preface

Let's face it: finance betrayed itself, its customers, and the public at large.1 This time, finance has become itself a source of instability. This situation creates a completely different approach to regulation. Financiers hate it but provoked this new wave by their own irresponsibility.

Can it be regulated in a way that will no longer make it destabilize the economy? Can it solve its own crises without requesting interventions that use taxpayers’ money? Can it regain a lost trust and reputation?

Antony Jenkins, chief executive officer of Barclays Plc, said it may take a decade to rebuild trust in the bank after a series of scandals from interest-rate manipulation to selling customers insurance they didn't need. “It is about what you do, not what you say,” Jenkins said on the BBC's Today radio program. “Until people start to perceive the change, Barclays will not begin rebuilding that trust.”2

The various financial crises3 that have populated the past 50 years have demonstrated the huge challenges facing any attempt to regulate global finance. While domestic regulation is in itself an unsatisfactory way to prevent such crises, regulating global finance presents huge challenges.

One cannot expect finance to be stable in an unstable world. What needs to be addressed is the ways and means to ensure that finance itself does not become an additional factor of global instability to the real economy.

Since the beginning of the twenty-first century, at least 20 financial institutions ...

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