Alexandra Zeitz (Global Economic Governance Programme, University of Oxford)
PEFM hosts Nicholas Morris and David Vines, introducing their 2014 book Capital Failure
Has finance has lost its sense of moral opprobrium, the ethical compass of the profession? So argued Nicholas Morris and David Vines in their October 27 PEFM presentation introducing their 2014 book Capital Failure: Rebuilding Trust in Financial Services, also offering proposals of how to encourage trustworthy behaviour.
Analyses of the 2008 financial crisis, whether by regulators or industry insiders, have predominantly treated the crisis as a consequence of market failures. Morris and Vines, however, argue that at the root of these market failures are problems of trust. Crucially, they claim that regulations alone will not be sufficient to restrict risky behaviour, since imbalances in information and expertise mean regulators will be repeatedly outwitted and outstripped.