Understanding how finance has moved from “Hubris to Disgrace”. (2015)

“As banking scandals continue.. the question is whether regulations can protect citizens … (against bankers with) a deep-seated disregard for the rules?

Mark Esposito, Harvard University Extension & Grenoble School of Management;
Terence Tse, ESCP Europe Business School

LSE – USAPP blog, 29 January 2015

“Despite more than six years passing since the onset of the 2008 financial crisis, it appears that the financial sector has yet to learn lessons of morality from the disgrace that shadowed the industry. …..

“As scandals continue to be unveiled, it begs the question whether or not regulations as we understand them today are capable of successfully protecting citizens from economic and financial volatility by putting an end to what we might best define as a deep-seated disregard for the rules and regulations among those who run our financial systems.”

The authors explore why the world of finance has evolved “From Hubris to Disgrace”. Considering four aspects in turn they illuminate the sophisticated relationships between finance and everyone else. They also seek a new path for finance, one that involves recalibrating our systems of checks and balances, reinforcing a code of ethics and responsibility, and ensuring a proper response to those who abuse the system.

The aspects of finance they review are:

Mechanics: …”is the financial sector a central part of the real economy? Does it produce a real service to facilitate trade, or is it its own self-contained commodity?”

Economics: reflecting on “the relevance of the basic economic role and function of money as well as the mechanisms of money creation”

Politics: “who (or what) runs our financial systems?”

Philosophy: a critical reflection on the ideal role of the financial sector.

Read the full blog here: Understanding how finance has moved from “Hubris to Disgrace”.

The book ‘The philosophy, politics and economics of finance in the 21st Century: From hubris to disgrace’ is to be published by Routledge at the end of Spring 2015. Pre-order a copy here: ‘From hubris to disgrace: the book’