A Call for Judgment
Sensible Finance for A Dynamic EconomyeBook - 2010
In the wake of the financial crisis, anxious questions have arisen about the very sustainability of our economic system. Has capitalism failed? Does it require top-to-bottom reform? In A Call for Judgment, acclaimed economist Amar Bhide resists the impulse for drastic change, instead offeringa blueprint for correcting the historic misalignment between the numbers-driven financial sector and the innovation-driven "real economy." Bhide warns us that modern finance is on a collision course with the true heart of capitalism: innovation and entrepreneurship. Deepening this disconnect is the growing complexity of banks, which habitually fail to hold bankers accountable for their mistakes, while blatantly subverting the toughbanking rules established in the 1930s. As Bhide makes clear, the erosion of these rules displaced traditional relationship-based lending in favor of liquid, anonymous securities, which ultimately succeeded in depriving large banks (and other publicly traded companies) of oversight by investors withfirst-hand knowledge of the business or its managers. Identifying this lack of monitoring as a fatal flaw that destabilized the economy and helped trigger the financial crisis, Bhide pushes for tough, straightforward limits on the activities of commercial banks and financial instruments such asmoney market funds. And, in a no-nonsense, well-researched call to arms, he convincingly argues for shifting the responsibilities of regulators - and the rules they enforce - to the real experts: talented, enterprising individuals. This timely, indispensable resource is both a primer on the role of finance in the modern economy and a cautionary tale about the pitfalls of banks functioning as highly centralized, mechanistic entities. Most of all, it reaffirms the dynamic essence of capitalism - which has given so many thechance to apply their imagination and judgment - as the key to future prosperity.
Publisher: Oxford ; New York : Oxford University Press, 2010.
Characteristics: 1 online resource (x, 353 pages)