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The White Swan Formula: Part. 2

The White Swan Formula: Part. 2

JAMES FEATHERBY, THIS MONTHS GUEST SPEAKER, WRITING IN 2009

The White Swan Formula: Part. 2

The White Swan Formula: Part. 2

JAMES FEATHERBY, THIS MONTHS GUEST SPEAKER, WRITING IN 2009

James Featherby will be visiting the Chanel Islands later this month to speak at Business Connect hosted events (register here) In the run up we will be serialising his post crash analysis here on the blog


Part Two: Lessons


We have learnt some important lessons. Together, these are a profound shock to the philosophical and economic assumptions that have underpinned the West for the last 25 years.

1. We are more prone to temptation than we thought. If left to our own devices we often do not behave either rationally or well. Deregulation has proved unwise.

2. However, regulation alone is not suffıcient. Passing more laws does not deliver responsible behaviour any more than it delivers profıtable business.

3. We are not as clever as we thought. We have created structures we do not understand and cannot control, and we have realised that the future is more uncertain than we imagined.

4. The prosperity of each of us is more connected to the well-being of others than we thought.

5. Maximisation of shareholder value as a strategy for business has contributed to the problem, not solved it.

6. The market does not protect us from disaster and, when economic shocks do occur, the market will not save us.

These lessons have left us in uncharted waters with no reliable means of navigation. They have ignited, for the fırst time in a generation, real interest in discussing the best principles upon which to base national and international business and fınance.

The UK’s Fınancial Services Authority has recently published the Turner Review, its regulatory response to the global banking crisis. The report openly questions the fundamental theoretical basis of global capital markets along similar lines, and deliberately leaves these questions unanswered.

This paper was orgianlly published by the LICC in 2009. You can access the whole paper here

James Featherby

James Featherby

James Featherby has worked in the City for more than 30 years. For most of this time he was a...

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