Banks' profit logic "destroys the real economy"
The current functioning of global finance is contrary to the spirit of liberalism and destroys the real economy, denounces Marc Chesney, professor of finance at the University of Zurich.
The introduction of a financial transaction tax could remedy this, he said.
And it is up to Switzerland, in particular, to set an example by taking the lead, underlines the researcher in an interview published in the NZZ am Sonntag.
A 0,1% charge on each transaction would be enough to eliminate high frequency trading. This process, which allows high-speed execution of stock market transactions via algorithmic computer programs, is considered problematic by Marc Chesney, because it presents significant risks for the stability of the international financial system.
It is impossible that in a fraction of a second fundamental data about a company is not communicated. Investors are using this advance to quickly generate gains.
Bankruptcy speculation prohibited
In addition, a bank should not be able to speculate on the bankruptcy of a company or put into circulation opaque financial instruments, such as structured products. These complex arrangements do not benefit the real economy and often only benefit banks.
"Complexity is a factor of profit and power," says Marc Chesney. The total nominal value of the derivatives market thus represents almost a tenth of world economic activity.
According to statistics compiled by the International Monetary Fund (IMF), the total volume of derivatives traded is 640 billion dollars (594 billion francs), while all the national economies of the world combined generate each year "only" $ 72 billion.
Assume the consequences
Large banks and stock brokers are so powerful that they have had the power to dictate financial policy to governments and society for years. In addition, the fact that the States came to the aid of big banks on the verge of bankruptcy is contrary to liberal logic, which would like that which takes risks assumes the consequences.
Source: http://www.24heures.ch/economie/argent- ... y/15911436