Saved Anthologies

Foreign Affairs Anthology Series

The Best Books of 2015


All anthologies are free when you subscribe

Other People's Money: The Real Business of Finance

In This Review

Other People's Money: The Real Business of Finance
By John Kay
PublicAffairs, 2015
352 pp.

This important book is simultaneously a clear primer on modern financial systems and a scathing indictment of them. It acknowledges the essential role of finance in modern economies but levels three critical charges at modern financial systems: they are larger than necessary, they perform inefficiently or worse, and they transfer unjustifiably large sums of money to the financial sector from the rest of the economy. Financial sectors have become self-referential systems, preoccupied with trading within the sector rather than providing services to households and nonfinancial firms. Along with offering this detailed diagnosis, Kay suggests some prescriptions: separate deposit-taking institutions from those that handle most other financial activities; require that financial firms maintain adequate levels of capital, which would lower returns on equity and eventually lead to a market-driven reduction in largely superfluous financial trading; and impose strict liability on managers, since those who are richly rewarded should take the rap for any malfeasance that happens on their watch—and ignorance should be no defense.

Enjoy more high quality articles like this one.

Become a Subscriber

  • Paywall-free reading of new articles posted daily online and almost a century of archives
  • Unlock access to iOS/Android apps to save editions for offline reading
  • Six issues a year in print, online, and audio editions
Subscribe Now

Related Articles

This site uses cookies to improve your user experience. Click here to learn more.