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Realizing Private Capital’s Public Benefits

GENEVA – Greece’s youthful left-wing leader, Alexis Tsipras, has a point – certainly polemical and undoubtedly over-simplified – in declaring that the time has come to confront “global capitalists, bankers, profiteers on stock exchanges, the big funds.” With Europe staggering under the blows of investors intent on profiting from a catastrophe largely of their own making, it is time to reflect on the public purpose of global capital markets. As Nobel laureate Joseph Stiglitz has put it: “Finance is a means to an end, not an end in itself. It is supposed to serve the interests of the rest of society, not the other way around.”

Consider, for example, JPMorgan Chase’s recently revealed trading loss of more than $3 billion. The lesson should be obvious: even those considered to be among the best in the business cannot be trusted with our hard-earned savings – capital that is needed to contribute to the creation of an inclusive and sustainable global economy – without a fundamentally different approach to governance.