Comments for Guns, drugs and financial markets at http://www.adamsmith.org , comment 1 to 2 out of 2 comments http://www.adamsmith.org Thu, 28 Aug 2008 10:39:11 +0100 FeedCreator 1.7.3 http://www.adamsmith.org/blog/regulation-and-industry/guns,-drugs-and-financial-markets-200804211257/#comment-61 Risk is the oxygen of development, and therfore we need to be extremely careful with the limitations we put on risk taking. For instance what good would it do us manage to totally wrangle out risks from the financial sector but the financial sector does not do its job correctly?…and so that the last standing economic survivor is one huge world bank where we all have to work as economically efficient human alternatives to automated bank tellers? Currently the only objective set up by the financial regulators and most specially by the bank regulators anchored on Basle, has been for the banks not to default… and I must say that to me sounds like a true purposeless objective. Sure we want more of our financial system. A young entrepreneur with a good idea and lots of initiative but no financial backing will always find it more difficult o borrow money that someone who just wants to advance some consumption and has good earning prospects or other assets to guarantee his borrowing with. That is the market price for risk. But, on top of that market premium for risk, as if it was not enough, our bank regulators have introduced, through the minimum capital requirements based on default risk as measured by the credit rating agencies, an additional tax on risk, a regulatory risk adverseness tax so to say. We really have to start thinking again about a financial sector that produces more real sustainable results than the last western world growth cycle has to show for itself. I have always said we need to measure the full boom-bust to find out the net results because focusing solely on the hangover (bank-crisis) will just keep us away from the parties. In that respect it would behoove us to think of risk more in terms of an element to be consumed in order to produce some other results than pure short-term profitability, like for instance units of risk of default per decent job created, per person educated or per environmental hazard avoided. - Per Kurowski Mon, 21 Apr 2008 14:40:23 +0100 http://www.adamsmith.org/blog/regulation-and-industry/guns,-drugs-and-financial-markets-200804211257/#comment-60 It occured to me the other night watching some news story about the prevalence of drugs in prison and it suddenly struck me there is a bloody good argument for stopping the fight against drugs immediately. Just how much of a police state do the prohibitionists wish to live in? Because if they actually want to have any effect on drugs, we would have to live in a society with less freedom than those currently in Jail. If they cannot even stop drugs in jails, which they obviously can't - what chance in hell do they have of controlling drugs in the country at large? Precisely none. Z. - Zorro Mon, 21 Apr 2008 13:15:17 +0100