Key Challenges Facing Modern Finance: Making the Financial Sector Serve Society
https://doi.org/10.26794/2587-5671-2020-24-2-6-21
Abstract
The purpose of this paper is to discuss the broad issue of how to make the financial sector serve society, at least serve it better than it has until now. Finance has been the centre of attention, for better or for worse, for more than a quartercentury, partly because of its increasing share of GDP, and partly because of the negative behaviour and activities of its professionals. The paper is divided into six parts. The first section concerns the necessity of stopping adverse behaviours (activities). Section II presents some measures aimed at encouraging positive activities and promoting positive behaviour. Section III discusses a crucial issue concerning the urgent need to curb rent-seeking. Section IV discusses taxation in the context of the corrosive effect of tax competition. Section V, using analysis provided, presents measures to enhance the role of government in restoring the public’s eroded trust in financial institutions. Finally, Section VI discusses questions about how we can restore trust.
Keywords
regulation,
financial crises,
boom-busts,
Dodd-Frank Act,
Great Depression,
Great Recession,
housing boom,
banking,
inequality
JEL: D72, D78, E42, E44, E52, F32, F38; G14, G18, N2
About the Author
J. E. Stiglitz
Columbia University
United States
United States
Joseph E. Stiglitz — 2001 Winner of Nobel Memorial Prize in Economic Sciences, Professor
New York
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Review
For citations:
Stiglitz J.E. Key Challenges Facing Modern Finance: Making the Financial Sector Serve Society. Finance: Theory and Practice. 2020;24(2):6-21. https://doi.org/10.26794/2587-5671-2020-24-2-6-21
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