80. What Good Is Modern Finance?

April 28, 2009 § Leave a comment

Yes

What Good Is Modern Finance?

Modern finance exists to (i) channel purchasing power from households with savings to businesses with investment projects, (ii) improve corporate governance, and (iii) diversify risks. It has been a bust as far as (ii) and (iii) are concerned. And do we really need more than stocks and bonds if we are to do (i)? The argument that derivatives markets need to remain open is an argument that they help in (iii). And that is not a slam dunk.

via Grasping Reality with Both Hands: What Good Is Modern Finance?.

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You are currently reading 80. What Good Is Modern Finance? at Reflections on GardenWorld Politics Douglass Carmichael.

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