Cambridge Business Association
Faith-Based Finance
Article

Faith-Based Finance

How Wall Street Became a Cult of Risk

Gillian Tett
Foreign Affairs, 2019
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Editorial Rating

9

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Recommendation

Words and their meanings matter. Financial journalist Gillian Tett provides a well-structured and thoughtful analysis into the origins of the words “finance,” “credit” and “bank” as they relate to the causes of the Great Recession. She persuasively argues that financiers developed an inflated view of the goods they were offering in their increasingly complicated world, in which finance had become an end in itself rather than the means to an end. Executives, analysts and students of finance will find these economic musings important food for thought.

Summary

To understand the Great Recession, look to the original meanings of the words “finance,” “credit” and “bank.”

Prior to the 2008 global financial crisis, Wall Street was enjoying a stellar time. New products, such as collateralized debt obligations (CDOs) that were supposed to make financial markets more efficient and less risky, proliferated. Yet all the joy came to a screeching halt when the credit bubble burst.

Derived from the French finer, “to end,” finance was once just a way to achieve a goal.

But rising Wall Street pay, deregulation and product...

About the Author

Gillian Tett is US editor-at-large for the Financial Times. 

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