A part of the WikiStage conference series "The Good in Finance" with WikiTalks at ESCP campuses in London, Berlin and Paris.
Finance has been called destructive. Evil, even - Can Finance make our world a better place?
A part of WikiStage conference series "The Good in Finance" brought together experts to discuss the merits and perils of the world of finance.
Nicolas Mottis =nous montre que c'est possible pour une entreprise d'être, à la fois créatrice de la richesse financière et créatrice de la richesse au sens social.
« Vous pouvez tout à fait être performant sur le plan financier comme entreprise et également avoir des ambitions de lien social. »
Nicolas Bouzou is convinced that the depressing statements from the press about the crisis should not scare us. Because the crisis for him the crisis does not exist! A good dose of optimism in your day!
« L'une des difficultés lorsqu'on est économiste c'est que la perception des gens ne colle pas toujours à la réalité de l'économie. »
« L'économie mondiale ne s'est jamais bien aussi portée qu'aujourd’hui. »
« Non seulement l'économie mondiale va bien, mais elle va aller beaucoup mieux ces prochaines années et elle va nous permettre d'atteindre des perspectives qui étaient absolument insoupçonnées pour l'être humain il y a encore quelques siècles.
Évidemment, l'un des grands buts de l'économie c'est de faire en sorte que les gens soient les plus prospères possible et c'est de faire en sorte qu'il y ait de moins en moins de personnes pauvres.
Alors, vous savez que la pauvreté est un concept extrêmement multiforme mais les grandes institutions internationales considèrent qu'on est en situation d'extrême pauvreté quand on ne peut pas subvenir par soi-même, par son travail à ses besoins élémentaires qui sont essentiellement le fait de se nourrir.
La part des personnes pauvres aujourd'hui dans le monde n'a jamais été aussi faible puisqu'en trente ans, on est passé de 50 % à 20 %. Alors 20 %, bien évidemment ça peut vous paraître encore élevé, vous avez tout à fait raison, mais ce qui compte c'est la direction et il est en quelque sorte miraculeux qu'en trente ans ce taux de pauvreté ait perdu un point par an. »
« Nous voyons qu'à l'horizon de vingt ou de trente ans, nous pouvons avoir éradiqué quasiment la grande pauvreté sur Terre. »
WikiStage ESCP Europe -Berlin Campus
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WikiStage ESCP Europe - Berlin campus.
"When you look at Millennials, many of us don't trust banks anymore."
"Many startups fail to have a proper business model. Also, they are lacking in managerial experience running the business".
"A hedgehog concept is a very strong concept or idea and it means understanding what the company can become best at, instead of being mediocre."
"Technology is an accelerator."
"It's not technology that are driving innovation; digitalization is the people."
WikiStage ESCP Europe, Paris campus
“Can you actually say that the financial industry is broken, evil or destructive? Can you say that debt is necessarily a bad thing?”
“Financing is a very important factor for a strategy of growth.”
“I had the opportunity to manage a family business in Mexico. Mexico has a huge problem, because the economy is lacking access to finance sources, so small and medium sized companies do not have access to financing sources. (…) If these companies do not have sufficient financing, most of them will stay small, regional without possibilities to expand.”
“Lack of financing hurts the economy.”
“However, too much debt is also bad for the economy. There are some signs right now that there is a real estate bubble forming up in China which might explode and there is a huge amount of student loans outstanding in the United States.”
“Even today in 2016 banks are still struggling with capital requirements, reduced balance sheets and increased regulatory burden, so they are not lending.”
“Quantitative easing (printing money to buy back debt) has not reached the small and medium sized companies”
“Institutional investors have to put their money somewhere because one day they need to pay for your retirement. Scarcity of bank lending, changing regulation and investors’ need for yield has led to the disintermediation of the finance sector and alternative lenders have been growing and trying to fill this lending gap.”
“True, there have been excesses in finance. There have been false incentives in some cases, there have been bad people. But bad people exist everywhere, in every industry – look at Enron, FIFA or Volkswagen.”
“If all firms have access to financing in different stages of their lifecycle, in different forms and in a measured way – this will lead to more professionalized firms, better reporting structures, more transparency and that will lead to growth and economic prosperity.”
WikiStage ESCP Europe, Paris campus
"The majority of the middle management fail to adequately take culture and conduct matters into account and offer refer to traditional performance criteria such as revenue profits return on equity."
"Situation has not improved; many central bankers, high executives are claiming that situation has improved, but the result is not there."
"Financial industry plays an important role in allocating capital."
“When bankers tell me how honest they are I have a small doubt.”
“The people on top believe they are very honest themselves, but fail to communicate their ethics to the lower levels.”
“Many of Central Bankers and high executives claim that the situation is improved and that the situation will not be like it was in 2008 but the result is not there.”
"What can we do? The problem is not a few bad apples. In many of the banks we caught, the executives said: Don’t be mistaken, these violations were made by a few very dishonest people, we got rid of them and now everything is straight again. Well, I doubt it. I think the evil is beyond that, beyond individual behavior."
"The purpose of finances is to serve the real economy."
"Securatisation is transfering the risk from the lending bank to the public at large."
"The lobbying by the banks is too powerful in finance. In Finance Watch we have three lobbyists in Brussels, while the banks have 900. And whenever legislation is to be passed in Europe, the bank lobbyists come with a document already prepared and say it is much to difficult for them to understand and that is what they should vote for."
"In France in 2013 the government was lobbied by big banks and in the end the French banking law was really made to destroy what the European project meant to be."
"High frequency trading is how you can buy or sell securities in a fraction of a second. In a second you can have 50, 60 trades. This is of course open only for very large institutions. This is not open to the rest of the people. Then you ask the bankers what is the justification and they tell you it is for liquidity purposes. However, liquidity purposes in fraction of a second, it is not serious."
"I know banking is very important and useful for the society, the question is: are some of the activities like high frequency trading useful for the society or not?"
ESCP Europe, Paris campus
“Finance is risk and reward – you have to be rewarded for the risk that you take”
“There are two types of finance: the ‘good’ one and the ‘other’ one which I won’t call the bad finance. The good finance is long term oriented, developing links with the real economy, taking risks and getting rewarded for the risks.”
“The ‘other’ type of finance is more linked to financial markets, which is more short term oriented, whih implies trading and a lot of volatility. This type of finance, which I would not call ‘bad’ because it is necessary, has to be highly regulated. ”
“The real economy was not in such a bad shape in 2008 – it was a crisis in financial markets.”
“When you look at the subprime market – it is a virtual economy, it was very difficult to go from the bond you own and the real economy. This has created the crisis.”
“This type of finance has to be highly regulated, in order to cope with volatility.”
“The crisis has generated a different (peer-to-peer) financial market.”
“After 42 years in finance, I believe there is something good in finance, in terms of job creation and infrastructure.”