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Other People’s Money
Book

Other People’s Money

Masters of the Universe or Servants of the People?

John Kay
Profile Books, 2015

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Editorial Rating

8

Qualities

  • Innovative

Recommendation

Professor and Financial Times columnist John Kay deftly explains the development and ramifications of the current global financial system. He discusses how to restructure it to make it safer, sounder and more useful to the real economy. Kay maintains that financial firms – with the complicity of regulators – contribute little to everyday industry and commerce. His interdisciplinary and comprehensive approach, offered in plain English, makes frequent use of anecdotes to elucidate hard truths. You’ll find that Kay offers an iconoclastic perspective on the financialization of the global economy. While always politically neutral, getAbstract finds that his analysis presents a useful counterpoint for industry professionals and for anyone who works, pays bills or otherwise relies on the financial system.

Take-Aways

  • Finance is necessary for a prosperous economy, but the modern financial sector is too big, too politically powerful, too complex and too fragile.
  • Finance should do four essential jobs: manage payments, bring together lenders and borrowers, facilitate households’ finances and assist in risk management.
  • Bank bailouts created moral hazard by strengthening the incentives for risk taking.

About the Author

John Kay, a Financial Times columnist and a professor at the London School of Economics and at Oxford University, is a board member of numerous public corporations.

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