Jump to ContentJump to Main Navigation
Just Financial Markets?Finance in a Just Society$
Users without a subscription are not able to see the full content.

Lisa Herzog

Print publication date: 2017

Print ISBN-13: 9780198755661

Published to Oxford Scholarship Online: May 2017

DOI: 10.1093/oso/9780198755661.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 26 September 2021

It takes a village to maintain a dangerous financial system

It takes a village to maintain a dangerous financial system

Chapter:
(p.293) 13 It takes a village to maintain a dangerous financial system
Source:
Just Financial Markets?
Author(s):

Anat R. Admati

Publisher:
Oxford University Press
DOI:10.1093/oso/9780198755661.003.0013

The financial system is meant to facilitate efficient allocation of resources, helping people and businesses fund, invest, save, and manage risks. This system is rife with conflicts of interests. Reckless practices, uncontrolled by market forces and effective rules, can cause great harm. Most of the time, the harm from excessive risk in banking is invisible and the culprits remain unaccountable. This chapter discusses the motivations and actions (or inaction) of individuals in the financial system, governments, central banks, academia, and the media that collectively contribute to the persistence of a dangerous and distorted financial system and inadequate, poorly designed regulations. Reassurances that regulators are doing their best to protect the public are false. The underlying problem is a powerful mix of distorted incentives, ignorance, confusion, and lack of accountability. Willful blindness seems to play a role in flawed claims by the system’s enablers that obscure reality, muddling the policy debate.

Keywords:   financial system, systemic risks, reforms, capital regulations, capture, conflicts of interest, ignorance, willful blindness, accountability

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .