A Call for Judgment: Sensible Finance for a Dynamic Economy

Hardcover | October 15, 2010

byAmar Bhide

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In the wake of the financial crisis, anxious questions have arisen about the very sustainability of our economic system. Has capitalism failed? Does it require top-to-bottom reform? In A Call for Judgment, acclaimed economist Amar Bhide resists the impulse for drastic change, instead offeringa blueprint for correcting the historic misalignment between the numbers-driven financial sector and the innovation-driven "real economy." Bhide warns us that modern finance is on a collision course with the true heart of capitalism: innovation and entrepreneurship. Deepening this disconnect is the growing complexity of banks, which habitually fail to hold bankers accountable for their mistakes, while blatantly subverting the toughbanking rules established in the 1930s. As Bhide makes clear, the erosion of these rules displaced traditional relationship-based lending in favor of liquid, anonymous securities, which ultimately succeeded in depriving large banks (and other publicly traded companies) of oversight by investors withfirst-hand knowledge of the business or its managers. Identifying this lack of monitoring as a fatal flaw that destabilized the economy and helped trigger the financial crisis, Bhide pushes for tough, straightforward limits on the activities of commercial banks and financial instruments such asmoney market funds. And, in a no-nonsense, well-researched call to arms, he convincingly argues for shifting the responsibilities of regulators - and the rules they enforce - to the real experts: talented, enterprising individuals. This timely, indispensable resource is both a primer on the role of finance in the modern economy and a cautionary tale about the pitfalls of banks functioning as highly centralized, mechanistic entities. Most of all, it reaffirms the dynamic essence of capitalism - which has given so many thechance to apply their imagination and judgment - as the key to future prosperity.

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In the wake of the financial crisis, anxious questions have arisen about the very sustainability of our economic system. Has capitalism failed? Does it require top-to-bottom reform? In A Call for Judgment, acclaimed economist Amar Bhide resists the impulse for drastic change, instead offeringa blueprint for correcting the historic misa...

Amar Bhide, Visiting Scholar at Harvard's Kennedy School, was previously the Laurence D. Glaubinger Professor of Business at Columbia University and was a former Senior Engagement Manager at McKinsey and Company and proprietary trader at E.F. Hutton. He is the author of The Venturesome Economy: How Innovation Sustains Prosperity in a ...

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Format:HardcoverDimensions:384 pages, 9.25 × 6.12 × 0.98 inPublished:October 15, 2010Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0199756074

ISBN - 13:9780199756070

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Table of Contents

PrefaceIntroductionPart 1: Ordering the Innovation Game: Beyond Decentralization and Prices1. The Decentralization of Judgment2. The Halfway House - Coordination through Organizational Authority3. Dialogue and Relationships4. Reflections in the Financial MirrorPart 2: Why it Became So5. All-Knowing Beings6. Judgment Free Finance7. Storming the Derivative Front8. Liquid Markets, Deficient Governance9. Financiers Unfettered10. The long slog to stable banking11. Not there Yet12. Finally on Track13. Derailed by Deregulation14. Restoring Real FinanceAcknowledgmentsNotesReferencesIndex