thank you so much for having me let’s talk about what dominates
let’s talk about what dominates
let’s talk about what dominates headlines today in terms of risks things
headlines today in terms of risks things
headlines today in terms of risks things we worry about things we wake up with a
we worry about things we wake up with a
we worry about things we wake up with a cold sweat in the middle of the night
cold sweat in the middle of the night
cold sweat in the middle of the night thinking about climate change is one big
thinking about climate change is one big
thinking about climate change is one big issue general environmental degradation
issue general environmental degradation
issue general environmental degradation many people say for example that the
many people say for example that the
many people say for example that the water crisis is even more serious than
water crisis is even more serious than
water crisis is even more serious than global warming is another one rising
global warming is another one rising
global warming is another one rising inequality not across countries but
inequality not across countries but
inequality not across countries but within countries is something that we
within countries is something that we
within countries is something that we see the numbers are very clear on that
see the numbers are very clear on that
see the numbers are very clear on that particularly since Lehman’s crash and it
particularly since Lehman’s crash and it
particularly since Lehman’s crash and it is starting to really affect our lives
is starting to really affect our lives
is starting to really affect our lives in terms of the response to this rising
in terms of the response to this rising
in terms of the response to this rising inequality particularly within the OECD
inequality particularly within the OECD
inequality particularly within the OECD in that sense rising populism exactly
in that sense rising populism exactly
in that sense rising populism exactly also is an issue that we are grappling
also is an issue that we are grappling
also is an issue that we are grappling with increasingly particularly in Europe
with increasingly particularly in Europe
with increasingly particularly in Europe and in the United States so what is if
and in the United States so what is if
and in the United States so what is if any the common thread across most of
any the common thread across most of
any the common thread across most of these problems that we grapple with what
these problems that we grapple with what
these problems that we grapple with what is this elephant in the room that
is this elephant in the room that
is this elephant in the room that connects these and my answer to this is
connects these and my answer to this is
connects these and my answer to this is it’s actually the financial system the
it’s actually the financial system the
it’s actually the financial system the financial system like would like to
financial system like would like to
financial system like would like to think it is very complicated and I
think it is very complicated and I
think it is very complicated and I remember the pre Lehman days where
remember the pre Lehman days where
remember the pre Lehman days where anytime you talk to a banker they would
anytime you talk to a banker they would
anytime you talk to a banker they would talk about finance as rocket science and
talk about finance as rocket science and
talk about finance as rocket science and it was the best way to stop people
it was the best way to stop people
it was the best way to stop people discussing how finance actually worked I
discussing how finance actually worked I
discussing how finance actually worked I mean it is nothing like rocket science
mean it is nothing like rocket science
mean it is nothing like rocket science perhaps a more fitting analogy sticking
perhaps a more fitting analogy sticking
perhaps a more fitting analogy sticking with elephants is it’s been the case of
with elephants is it’s been the case of
with elephants is it’s been the case of the five blind men and the elephant
the five blind men and the elephant
the five blind men and the elephant where everybody beat us as retail
where everybody beat us as retail
where everybody beat us as retail customers of banks or pension holders
customers of banks or pension holders
customers of banks or pension holders putting money in their pension funds or
putting money in their pension funds or
putting money in their pension funds or financial regulators central banks
financial regulators central banks
financial regulators central banks overseeing certain aspects of the
overseeing certain aspects of the
overseeing certain aspects of the financial system etc or as a company or
financial system etc or as a company or
financial system etc or as a company or an entrepreneur trying to raise money
an entrepreneur trying to raise money
an entrepreneur trying to raise money we all saw various parts of the elephant
we all saw various parts of the elephant
we all saw various parts of the elephant somebody saw the tail and thought it was
somebody saw the tail and thought it was
somebody saw the tail and thought it was a rope somebody felt
a rope somebody felt
a rope somebody felt the leg and potted was a pillar but
the leg and potted was a pillar but
the leg and potted was a pillar but frankly there wasn’t really much of an
frankly there wasn’t really much of an
frankly there wasn’t really much of an incentive for anybody to really
incentive for anybody to really
incentive for anybody to really understand how the financial system as a
understand how the financial system as a
understand how the financial system as a whole worked of course that has all
whole worked of course that has all
whole worked of course that has all changed with Lehman so where does that
changed with Lehman so where does that
changed with Lehman so where does that leave us and what can we do to make sure
leave us and what can we do to make sure
leave us and what can we do to make sure that the financial system which has been
that the financial system which has been
that the financial system which has been functioning rather poorly in past few
functioning rather poorly in past few
functioning rather poorly in past few decades and has indirectly or directly
decades and has indirectly or directly
decades and has indirectly or directly in some cases given rise to these major
in some cases given rise to these major
in some cases given rise to these major problems that we grapple with how can we
problems that we grapple with how can we
problems that we grapple with how can we deploy it in our service that’s
deploy it in our service that’s
deploy it in our service that’s basically what I’m going to try and talk
basically what I’m going to try and talk
basically what I’m going to try and talk about now it is helpful to avoid jargon
about now it is helpful to avoid jargon
about now it is helpful to avoid jargon it is helpful to avoid big fancy words
it is helpful to avoid big fancy words
it is helpful to avoid big fancy words the financial community likes to use so
the financial community likes to use so
the financial community likes to use so let’s try and perhaps think of finance
let’s try and perhaps think of finance
let’s try and perhaps think of finance as a traffic system well it’s not too
as a traffic system well it’s not too
as a traffic system well it’s not too different in terms of the basic function
different in terms of the basic function
different in terms of the basic function that performs so there’s many people who
that performs so there’s many people who
that performs so there’s many people who will say finances like the brain of the
will say finances like the brain of the
will say finances like the brain of the economy in the sense that it is actually
economy in the sense that it is actually
economy in the sense that it is actually the financial system which attaches
the financial system which attaches
the financial system which attaches relative value to goods the value of
relative value to goods the value of
relative value to goods the value of that house in London versus the stock in
that house in London versus the stock in
that house in London versus the stock in an Indian Bank versus how much you get
an Indian Bank versus how much you get
an Indian Bank versus how much you get paid versus how much your CEO gets paid
paid versus how much your CEO gets paid
paid versus how much your CEO gets paid all of these the value description is
all of these the value description is
all of these the value description is directly or indirectly the result of the
directly or indirectly the result of the
directly or indirectly the result of the financial system and very importantly
financial system and very importantly
financial system and very importantly indirectly as a result of these values
indirectly as a result of these values
indirectly as a result of these values finance is actually responsible for
finance is actually responsible for
finance is actually responsible for allocating resources within the economy
allocating resources within the economy
allocating resources within the economy right in the same way that our brain
right in the same way that our brain
right in the same way that our brain besides whether our left hand is moving
besides whether our left hand is moving
besides whether our left hand is moving or our right leg whether I’m running or
or our right leg whether I’m running or
or our right leg whether I’m running or painting the financial system channels
painting the financial system channels
painting the financial system channels resources to where they ought to go and
resources to where they ought to go and
resources to where they ought to go and similarly transport system is supposed
similarly transport system is supposed
similarly transport system is supposed to do the same job it is supposed to get
to do the same job it is supposed to get
to do the same job it is supposed to get people from where they live to where
people from where they live to where
people from where they live to where they work it is supposed to get you from
they work it is supposed to get you from
they work it is supposed to get you from home to school to universities it is
home to school to universities it is
home to school to universities it is supposed to transport food from where it
supposed to transport food from where it
supposed to transport food from where it is grown where the supplies to where the
is grown where the supplies to where the
is grown where the supplies to where the demand is where you live where you eat
demand is where you live where you eat
demand is where you live where you eat so finance is similarly expected to
so finance is similarly expected to
so finance is similarly expected to take savings and money from there there
take savings and money from there there
take savings and money from there there are too many from there where return
are too many from there where return
are too many from there where return opportunities are not as attractive to
opportunities are not as attractive to
opportunities are not as attractive to deliver that money to parts of the
deliver that money to parts of the
deliver that money to parts of the economy to parts of the world where
economy to parts of the world where
economy to parts of the world where there is a shortage of capital where the
there is a shortage of capital where the
there is a shortage of capital where the return on that capital can actually be
return on that capital can actually be
return on that capital can actually be significantly higher so let’s stick with
significantly higher so let’s stick with
significantly higher so let’s stick with this analogy for a second now it’s not
this analogy for a second now it’s not
this analogy for a second now it’s not that we had the good old days where
that we had the good old days where
that we had the good old days where everything worked perfectly but what we
everything worked perfectly but what we
everything worked perfectly but what we did have was a reasonably
did have was a reasonably
did have was a reasonably well-functioning financial system in
well-functioning financial system in
well-functioning financial system in terms of the traffic what you had was
terms of the traffic what you had was
terms of the traffic what you had was you had cars you had trucks you had
you had cars you had trucks you had
you had cars you had trucks you had public transport systems you had buses
public transport systems you had buses
public transport systems you had buses you had railroads you had people walking
you had railroads you had people walking
you had railroads you had people walking people on bicycles and it was pretty
people on bicycles and it was pretty
people on bicycles and it was pretty well regulated the traffic system you
well regulated the traffic system you
well regulated the traffic system you had a lot of speed bumps
had a lot of speed bumps
had a lot of speed bumps speed limits were very strictly enforced
speed limits were very strictly enforced
speed limits were very strictly enforced there were a lot of traffic cops there
there were a lot of traffic cops there
there were a lot of traffic cops there were traffic cameras there were barriers
were traffic cameras there were barriers
were traffic cameras there were barriers pedestrian zones where you could
pedestrian zones where you could
pedestrian zones where you could couldn’t go cycle lanes and that sort of
couldn’t go cycle lanes and that sort of
couldn’t go cycle lanes and that sort of system was you know if you look at any
system was you know if you look at any
system was you know if you look at any of the clips from the 1970s and 80s
of the clips from the 1970s and 80s
of the clips from the 1970s and 80s you see rather slow moving traffic and
you see rather slow moving traffic and
you see rather slow moving traffic and you see roads that are not that
you see roads that are not that
you see roads that are not that congested and you see what looks like a
congested and you see what looks like a
congested and you see what looks like a rather benign looking traffic system
rather benign looking traffic system
rather benign looking traffic system finance was not much different there
finance was not much different there
finance was not much different there were banks mostly your local
were banks mostly your local
were banks mostly your local neighborhood banks some were regional
neighborhood banks some were regional
neighborhood banks some were regional there were a few big giants there were
there were a few big giants there were
there were a few big giants there were some pension funds there were some
some pension funds there were some
some pension funds there were some insurers there were some advisors some
insurers there were some advisors some
insurers there were some advisors some specialists but for the most part
specialists but for the most part
specialists but for the most part banking was a rather boring job finance
banking was a rather boring job finance
banking was a rather boring job finance was nothing particularly exciting it was
was nothing particularly exciting it was
was nothing particularly exciting it was well-paid but not the kind of money that
well-paid but not the kind of money that
well-paid but not the kind of money that we have been seeing recently and it was
we have been seeing recently and it was
we have been seeing recently and it was very strictly regulated you had strict
very strictly regulated you had strict
very strictly regulated you had strict limits on what any particular
limits on what any particular
limits on what any particular institution could do or couldn’t do you
institution could do or couldn’t do you
institution could do or couldn’t do you had strict limits on how you could sell
had strict limits on how you could sell
had strict limits on how you could sell products to retail customers you had
products to retail customers you had
products to retail customers you had limits on what pension funds could
limits on what pension funds could
limits on what pension funds could invest their money in and what
invest their money in and what
invest their money in and what they couldn’t do you had limits and
they couldn’t do you had limits and
they couldn’t do you had limits and cross-border flows of money all in all
cross-border flows of money all in all
cross-border flows of money all in all the regulator’s were quite powerful they
the regulator’s were quite powerful they
the regulator’s were quite powerful they kept a close watch on everything that
kept a close watch on everything that
kept a close watch on everything that was going on in the financial system and
was going on in the financial system and
was going on in the financial system and things worked reasonably well and the
things worked reasonably well and the
things worked reasonably well and the fruit of those of those well-regulated
fruit of those of those well-regulated
fruit of those of those well-regulated systems were very easy to see
systems were very easy to see
systems were very easy to see we saw post-world War two particularly
we saw post-world War two particularly
we saw post-world War two particularly in the 60s and the 70s onwards we saw
in the 60s and the 70s onwards we saw
in the 60s and the 70s onwards we saw fantastic growth rates we saw poverty
fantastic growth rates we saw poverty
fantastic growth rates we saw poverty reduction we saw great creation of new
reduction we saw great creation of new
reduction we saw great creation of new jobs we saw falling inequality and we
jobs we saw falling inequality and we
jobs we saw falling inequality and we saw what was generally a
saw what was generally a
saw what was generally a well-functioning
well-functioning
well-functioning economic system that was partly driven
economic system that was partly driven
economic system that was partly driven by a financial system that did its job
by a financial system that did its job
by a financial system that did its job relatively well but that started to
relatively well but that started to
relatively well but that started to change it’s hard to pinpoint when but
change it’s hard to pinpoint when but
change it’s hard to pinpoint when but perhaps Maggie Thatcher’s and Ronald
perhaps Maggie Thatcher’s and Ronald
perhaps Maggie Thatcher’s and Ronald Reagan’s deregulation era starting in
Reagan’s deregulation era starting in
Reagan’s deregulation era starting in the 80s was a good starting point so
the 80s was a good starting point so
the 80s was a good starting point so over time these cars that were being
over time these cars that were being
over time these cars that were being driven gently became SUVs the trucks
driven gently became SUVs the trucks
driven gently became SUVs the trucks that you saw the six wheelers became the
that you saw the six wheelers became the
that you saw the six wheelers became the sixteen wheelers and the thirty-two
sixteen wheelers and the thirty-two
sixteen wheelers and the thirty-two wheelers some of them became oil tankers
wheelers some of them became oil tankers
wheelers some of them became oil tankers and started carrying dangerous products
and started carrying dangerous products
and started carrying dangerous products some oil tankers started carrying
some oil tankers started carrying
some oil tankers started carrying hazardous chemicals radioactive waste
hazardous chemicals radioactive waste
hazardous chemicals radioactive waste perhaps some people call these
perhaps some people call these
perhaps some people call these derivative products many of which as
derivative products many of which as
derivative products many of which as Warren Buffet has said and I used to
Warren Buffet has said and I used to
Warren Buffet has said and I used to trade some of them were actually toxic
trade some of them were actually toxic
trade some of them were actually toxic the second thing that happened was the
the second thing that happened was the
the second thing that happened was the speed limits were slowly abolished the
speed limits were slowly abolished the
speed limits were slowly abolished the traffic cops that were employed were
traffic cops that were employed were
traffic cops that were employed were relatively well-paid compared to the
relatively well-paid compared to the
relatively well-paid compared to the drivers driving these financial
drivers driving these financial
drivers driving these financial institutions I’m talking about financial
institutions I’m talking about financial
institutions I’m talking about financial regulators of course they started
regulators of course they started
regulators of course they started getting fired or the relative
getting fired or the relative
getting fired or the relative compensation fell behind so it became
compensation fell behind so it became
compensation fell behind so it became more and more attractive not to be a
more and more attractive not to be a
more and more attractive not to be a regulator but actually to be a banker
regulator but actually to be a banker
regulator but actually to be a banker the other developments of course were
the other developments of course were
the other developments of course were that the drivers started racing with
that the drivers started racing with
that the drivers started racing with each other because speed limits have
each other because speed limits have
each other because speed limits have been abolished this was one bank
been abolished this was one bank
been abolished this was one bank competing with the other
competing with the other
competing with the other trying to generate faster profits the
trying to generate faster profits the
trying to generate faster profits the stock market’s encouraging them on the
stock market’s encouraging them on the
stock market’s encouraging them on the basis of quarterly stock market returns
basis of quarterly stock market returns
basis of quarterly stock market returns big bonuses were an offer so all of the
big bonuses were an offer so all of the
big bonuses were an offer so all of the drivers could earn in theory bonuses
drivers could earn in theory bonuses
drivers could earn in theory bonuses that were ten times their base
that were ten times their base
that were ten times their base compensation such bonuses were simply
compensation such bonuses were simply
compensation such bonuses were simply not available in the good old days
not available in the good old days
not available in the good old days now this incentivized everybody to drive
now this incentivized everybody to drive
now this incentivized everybody to drive even faster and crazier and remember
even faster and crazier and remember
even faster and crazier and remember there are no longer driving relatively
there are no longer driving relatively
there are no longer driving relatively small cars or benign trucks but they’re
small cars or benign trucks but they’re
small cars or benign trucks but they’re driving big fuel tankers at breakneck
driving big fuel tankers at breakneck
driving big fuel tankers at breakneck speeds careening down the road while the
speeds careening down the road while the
speeds careening down the road while the regulator’s and the police that were
regulator’s and the police that were
regulator’s and the police that were supposed to keep guard have fewer and
supposed to keep guard have fewer and
supposed to keep guard have fewer and fewer resources the traffic cameras that
fewer resources the traffic cameras that
fewer resources the traffic cameras that existed were spray-painted over because
existed were spray-painted over because
existed were spray-painted over because one of the characteristics of derivative
one of the characteristics of derivative
one of the characteristics of derivative products is that they’re very very
products is that they’re very very
products is that they’re very very opaque and many derivative products were
opaque and many derivative products were
opaque and many derivative products were traded using offshore tax havens
traded using offshore tax havens
traded using offshore tax havens subsidiaries Lehman Brothers the
subsidiaries Lehman Brothers the
subsidiaries Lehman Brothers the institution I used to work for had more
institution I used to work for had more
institution I used to work for had more than three hundred subsidiaries and
than three hundred subsidiaries and
than three hundred subsidiaries and these tax haven subsidiaries were
these tax haven subsidiaries were
these tax haven subsidiaries were completely out of view for regulators so
completely out of view for regulators so
completely out of view for regulators so it was Russian doll-like secrecy so it
it was Russian doll-like secrecy so it
it was Russian doll-like secrecy so it was really not clear it became less and
was really not clear it became less and
was really not clear it became less and less visible to regulators or to traffic
less visible to regulators or to traffic
less visible to regulators or to traffic cops in the traffic system what was
cops in the traffic system what was
cops in the traffic system what was actually going on no doubt no no wonder
actually going on no doubt no no wonder
actually going on no doubt no no wonder under such a circumstance that a truck
under such a circumstance that a truck
under such a circumstance that a truck crashed and this truck happened to be
crashed and this truck happened to be
crashed and this truck happened to be called Lehman Brothers and it was loaded
called Lehman Brothers and it was loaded
called Lehman Brothers and it was loaded with toxic products and at the same time
with toxic products and at the same time
with toxic products and at the same time that the truck crash there was a descent
that the truck crash there was a descent
that the truck crash there was a descent of San Francisco fog on the traffic
of San Francisco fog on the traffic
of San Francisco fog on the traffic system so at that point the first
system so at that point the first
system so at that point the first assumption for everybody is that hey I’m
assumption for everybody is that hey I’m
assumption for everybody is that hey I’m not really sure whether this was
not really sure whether this was
not really sure whether this was carrying radioactive waste
carrying radioactive waste
carrying radioactive waste or was it sarin gas or some toxic
or was it sarin gas or some toxic
or was it sarin gas or some toxic product but that’s out on the road
product but that’s out on the road
product but that’s out on the road Lehman’s carcasses lying on the road and
Lehman’s carcasses lying on the road and
Lehman’s carcasses lying on the road and there’s toxic fumes I don’t think I
there’s toxic fumes I don’t think I
there’s toxic fumes I don’t think I should go driving today the second thing
should go driving today the second thing
should go driving today the second thing was Lehman crashed while racing Goldman
was Lehman crashed while racing Goldman
was Lehman crashed while racing Goldman morgan stanley and the second logical
morgan stanley and the second logical
morgan stanley and the second logical thing for me to think was oh my god do
thing for me to think was oh my god do
thing for me to think was oh my god do Goldman and Morgan Stanley also have
Goldman and Morgan Stanley also have
Goldman and Morgan Stanley also have that toxic waste and will they crash too
that toxic waste and will they crash too
that toxic waste and will they crash too so it made complete rational sense given
so it made complete rational sense given
so it made complete rational sense given this level of uncertainty where
this level of uncertainty where
this level of uncertainty where everybody’s logically assumed the worst
everybody’s logically assumed the worst
everybody’s logically assumed the worst possible case for everybody to stay at
possible case for everybody to stay at
possible case for everybody to stay at home and stop driving and of course when
home and stop driving and of course when
home and stop driving and of course when finance stops working when finance stops
finance stops working when finance stops
finance stops working when finance stops flowing the whole economy comes to a
flowing the whole economy comes to a
flowing the whole economy comes to a standstill this is exactly what happens
standstill this is exactly what happens
standstill this is exactly what happens in the event of a traffic jam this has
in the event of a traffic jam this has
in the event of a traffic jam this has happened this is what happens whenever
happened this is what happens whenever
happened this is what happens whenever there’s a big crash on the motorway and
there’s a big crash on the motorway and
there’s a big crash on the motorway and this is what happens whenever there is a
this is what happens whenever there is a
this is what happens whenever there is a strike but similarly that’s exactly what
strike but similarly that’s exactly what
strike but similarly that’s exactly what happened and we need to make sure that
happened and we need to make sure that
happened and we need to make sure that this doesn’t happen again so it’s not
this doesn’t happen again so it’s not
this doesn’t happen again so it’s not that finance has not crashed before this
that finance has not crashed before this
that finance has not crashed before this was something along the lines of the
was something along the lines of the
was something along the lines of the 90th financial crisis we have seen
90th financial crisis we have seen
90th financial crisis we have seen similarly traffic crashes happen all the
similarly traffic crashes happen all the
similarly traffic crashes happen all the time every single day a truck or a car
time every single day a truck or a car
time every single day a truck or a car crashes occasionally a plane Falls and
crashes occasionally a plane Falls and
crashes occasionally a plane Falls and once in a while there’s a train crash
once in a while there’s a train crash
once in a while there’s a train crash but what has changed is within the
but what has changed is within the
but what has changed is within the financial system over time the frequency
financial system over time the frequency
financial system over time the frequency of these crashes has increased how
of these crashes has increased how
of these crashes has increased how dangerous they are for the economy has
dangerous they are for the economy has
dangerous they are for the economy has become far more pernicious and this has
become far more pernicious and this has
become far more pernicious and this has something to do with the size of the
something to do with the size of the
something to do with the size of the institution the size of these trucks the
institution the size of these trucks the
institution the size of these trucks the nature of the products that they sell or
nature of the products that they sell or
nature of the products that they sell or they are they’re carrying the
they are they’re carrying the
they are they’re carrying the irresponsibility of the drivers at the
irresponsibility of the drivers at the
irresponsibility of the drivers at the helm of it and the poor resources of
helm of it and the poor resources of
helm of it and the poor resources of those who can enforce discipline
those who can enforce discipline
those who can enforce discipline behavior so this cannot continue now the
behavior so this cannot continue now the
behavior so this cannot continue now the question is what can be done what has
question is what can be done what has
question is what can be done what has been that what is being done to help
been that what is being done to help
been that what is being done to help reform the financial system in a way
reform the financial system in a way
reform the financial system in a way that it does actually start once again
that it does actually start once again
that it does actually start once again reducing inequality tackling climate
reducing inequality tackling climate
reducing inequality tackling climate change perhaps in the same way that it
change perhaps in the same way that it
change perhaps in the same way that it has successfully in the past tackled
has successfully in the past tackled
has successfully in the past tackled problems of food shortage for example
problems of food shortage for example
problems of food shortage for example and act in a way where crashes are less
and act in a way where crashes are less
and act in a way where crashes are less frequent and less dangerous for society
frequent and less dangerous for society
frequent and less dangerous for society well let’s stick with the traffic system
well let’s stick with the traffic system
well let’s stick with the traffic system analogy a number of lessons can be used
analogy a number of lessons can be used
analogy a number of lessons can be used from that same traffic system so the
from that same traffic system so the
from that same traffic system so the first one is the actual nature of the
first one is the actual nature of the
first one is the actual nature of the vehicles it is important you’ve
vehicles it is important you’ve
vehicles it is important you’ve presumably all heard the words too big
presumably all heard the words too big
presumably all heard the words too big to fail or systemically significant
to fail or systemically significant
to fail or systemically significant financial institutions these are
financial institutions these are
financial institutions these are technical words for what within the
technical words for what within the
technical words for what within the traffic system are dangerous fast moving
traffic system are dangerous fast moving
traffic system are dangerous fast moving trucks carrying hazardous chemicals
trucks carrying hazardous chemicals
trucks carrying hazardous chemicals there are financial institutions that
there are financial institutions that
there are financial institutions that are so big so powerful and trade so fast
are so big so powerful and trade so fast
are so big so powerful and trade so fast across borders that anytime something
across borders that anytime something
across borders that anytime something goes wrong with them that has
goes wrong with them that has
goes wrong with them that has consequences across the financial system
consequences across the financial system
consequences across the financial system so very tightly regulating the behavior
so very tightly regulating the behavior
so very tightly regulating the behavior of these hazardous chemical trucks
of these hazardous chemical trucks
of these hazardous chemical trucks called C fees or too-big-to-fail
called C fees or too-big-to-fail
called C fees or too-big-to-fail institutions is the first sensible way
institutions is the first sensible way
institutions is the first sensible way to go forward and one starting point
to go forward and one starting point
to go forward and one starting point perhaps is to make sure that maybe the
perhaps is to make sure that maybe the
perhaps is to make sure that maybe the 32 wheeler trucks should be shrunk down
32 wheeler trucks should be shrunk down
32 wheeler trucks should be shrunk down to the 16 wheel trucks maybe instead of
to the 16 wheel trucks maybe instead of
to the 16 wheel trucks maybe instead of having a speed limit of 80 km/h it
having a speed limit of 80 km/h it
having a speed limit of 80 km/h it should be reduced to 40 km/h maybe
should be reduced to 40 km/h maybe
should be reduced to 40 km/h maybe instead of having the normal licensing
instead of having the normal licensing
instead of having the normal licensing regime for the driver at the helm of
regime for the driver at the helm of
regime for the driver at the helm of these institutions they should be made
these institutions they should be made
these institutions they should be made to Grunder go rigorous additional tests
to Grunder go rigorous additional tests
to Grunder go rigorous additional tests to make sure that they drive responsibly
to make sure that they drive responsibly
to make sure that they drive responsibly perhaps rather than having these
perhaps rather than having these
perhaps rather than having these institutions checked every year as they
institutions checked every year as they
institutions checked every year as they are if you ever drive a car you know
are if you ever drive a car you know
are if you ever drive a car you know that every year you have to check that
that every year you have to check that
that every year you have to check that the car is Road worthy and that is the
the car is Road worthy and that is the
the car is Road worthy and that is the only way you are allowed to drive
only way you are allowed to drive
only way you are allowed to drive similarly for financial institutions
similarly for financial institutions
similarly for financial institutions every year they are subject to stress
every year they are subject to stress
every year they are subject to stress tests but maybe these tests need to be
tests but maybe these tests need to be
tests but maybe these tests need to be made more stringent so that is one way
made more stringent so that is one way
made more stringent so that is one way to go forward to change the nature of
to go forward to change the nature of
to go forward to change the nature of the vehicles on the road to change the
the vehicles on the road to change the
the vehicles on the road to change the nature of financial institutions that
nature of financial institutions that
nature of financial institutions that exist to make them smaller and to make
exist to make them smaller and to make
exist to make them smaller and to make them more different one part of the
them more different one part of the
them more different one part of the problem has been that more and more
problem has been that more and more
problem has been that more and more institutions have
institutions have
institutions have come similar to each other which means
come similar to each other which means
come similar to each other which means when one crashes everybody else reacts
when one crashes everybody else reacts
when one crashes everybody else reacts exactly in the same way and it leads to
exactly in the same way and it leads to
exactly in the same way and it leads to a huge traffic pileup the second
a huge traffic pileup the second
a huge traffic pileup the second important lesson that can be learned
important lesson that can be learned
important lesson that can be learned from the traffic regime is to make sure
from the traffic regime is to make sure
from the traffic regime is to make sure that there is a separate bicycle lane to
that there is a separate bicycle lane to
that there is a separate bicycle lane to expand the pedestrian zones to have a
expand the pedestrian zones to have a
expand the pedestrian zones to have a separate lane for buses and taxis and
separate lane for buses and taxis and
separate lane for buses and taxis and public transport and to make sure that
public transport and to make sure that
public transport and to make sure that the barriers between these are not criss
the barriers between these are not criss
the barriers between these are not criss crossed over again one of the
crossed over again one of the
crossed over again one of the consequences of the deregulation
consequences of the deregulation
consequences of the deregulation unleashed by touch’
unleashed by touch’
unleashed by touch’ and Reagan was that institutions
and Reagan was that institutions
and Reagan was that institutions essentially started behaving in any way
essentially started behaving in any way
essentially started behaving in any way that they wanted the same institutions
that they wanted the same institutions
that they wanted the same institutions which were forbidden from at the same
which were forbidden from at the same
which were forbidden from at the same time trading in derivative markets as
time trading in derivative markets as
time trading in derivative markets as selling to you and I and the little
selling to you and I and the little
selling to you and I and the little people and their savings products were
people and their savings products were
people and their savings products were allowed to do both at the same time
allowed to do both at the same time
allowed to do both at the same time which led to massive conflicts of
which led to massive conflicts of
which led to massive conflicts of interest so keeping and re-enacting
interest so keeping and re-enacting
interest so keeping and re-enacting these boundaries is a good disciplining
these boundaries is a good disciplining
these boundaries is a good disciplining way to make sure that the traffic system
way to make sure that the traffic system
way to make sure that the traffic system as a whole that the financial system as
as a whole that the financial system as
as a whole that the financial system as a whole does its job and there isn’t a
a whole does its job and there isn’t a
a whole does its job and there isn’t a massive conflict of interest and that
massive conflict of interest and that
massive conflict of interest and that each different part of the economy gets
each different part of the economy gets
each different part of the economy gets serviced by the kind of financial
serviced by the kind of financial
serviced by the kind of financial institution that is appropriate to it
institution that is appropriate to it
institution that is appropriate to it that we do not have what we saw which
that we do not have what we saw which
that we do not have what we saw which was savings banks all wanted to be like
was savings banks all wanted to be like
was savings banks all wanted to be like goldman sachs goldman sachs wanted to be
goldman sachs goldman sachs wanted to be
goldman sachs goldman sachs wanted to be like a hedge fund and we ended up in a
like a hedge fund and we ended up in a
like a hedge fund and we ended up in a situation where everybody suffered
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