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Monday 28 January 2008
What is the purpose of an Investment Bank?
Bearing in mind the news about the wannabe Nick Leeson across the English Channel, Yokel has been wondering about the purpose of the Investment Banks, previously known as Merchant Banks. Do they do anything but lend each other money and charge for it? And try to second guess whether the share/stock/foreign exchange markets are going up or down?
It really seems to Yokel to be no better than gambling. Gambling with
lots and lots of other people's money. Or even gambling with the
future of London as a financial centre. Given that the FSA
hasn't had a sweeping endosement from Parliament, perhaps investment
banks should in future be regulated by the Gambling
Commission. Then the activity can be treated like the problem that
it is, and the addicts sent for rehab.
And perhaps in the rest of the country we can get on with earning our daily crusts and saving for our retirements without having to fear that some fool has managed to throw it all away trying to be "clever".
George Soros, Nick Leeson, and now Jerome Kerviel. The one thing in common? Greed!
