The link below is to an article penned by Edward Hadas on Reuters. In it he raises the question of more market regulation and what, if any, benefits might flow from it.
The experience of recent years has confirmed to all but the most fanatical free-marketeers (usually those with a vested financial interest in retaining the status quo) that the current policy of hands-off regulation has been disastrous economically, and in its subsequent toll on society generally.
Everybody is affected by how the markets operate. Whether you are unemployed or retired, a CEO or self-employed, a factory worker or home carer, what happens in the world's markets has a direct bearing on your quality of life, for good or ill. We've seen this in spectacular fashion here in Ireland with the dot com bust and the implosion of the banking system through lack of oversight and the destructive effects of unfettered, naked greed.Excessive market volatility distorts the rest of economy. Exchange rates always move too fast for companies to respond sensibly. Share price frenzies lead to unhelpful excesses and shortages of new capital. Bond prices are generally less flighty, but the rapid emotional gyrations in the euro zone government bond market – overconfidence followed by panic – brought the region into crisis. When a decade of blind investor optimism suddenly exploded into the financial panic of 2008, developed economies entered a recession which has not yet ended.
For several years I've dabbled in shares and have watched their values fluctuate wildly as irrational waves of panic swept the markets, followed by equally irrational waves of optimism, usually based on QE.
The questions that arise from the attached article are both of ethics and morality and the freedom of markets to function without interference, regardless of the cost to the 99%.
After the catastrophe of 2008 is the world ready to grasp the nettle of regulation in the interests of those who habitually pay the price, literally and in terms of a poorer society, for the unending greed of the one percent?
And how do we begin to develop an acceptable model?
The menace of financial markets | Edward Hadas