John Kay
speaker
106 appearances
4 recordings
1 series
first heard Dec 2010
last heard Jan 2013
John Kay’s voice in public audio — every appearance, attributed to the second.
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Appearances
And it became pretty clear in 2007-8 that it was mostly the latter.
We do need financial services.
Countries without any financial services sector do very badly, think North Korea or Burma.
John Kay.
But it's not clear we need a financial services sector of the size and scale we have.
Most of all, we need banks to enable us to make payments, to pay bills, to withdraw cash, to receive our salaries and so on.
We need banks to be a store of value to preserve our savings.
And we need banks to make loans when we want to take out mortgages, when small and medium-sized businesses want to raise capital to expand.
We need banks for all of these things.
Whether we need people trading in complex securitised products which are themselves derived from other complex securitised products.
So they're very complicated packages and nobody quite understands what's in them.
Whether we need that is another matter altogether.
Let's be clear, the object is not to prevent banks going bust.
It's in the nature of capitalism and market economy that badly run organisations go bust.
Northern Rock and Lehman were badly run organisations and actually Lehman was a particularly badly run organisation.
We want these kind of organisations to go bust.
What we need to ensure is that it's possible for them to go bust without it screwing up the whole of the rest of the financial system.
And that was the problem, not that these organisations failed.
And that's why it's a mistake to think the route we should go down is one of supervising them so they won't fail.
Firstly, all that will do will be generate a lot of bureaucracy, and it won't stop them failing anyway.
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