December 23, 2014
Last week, Manuel Stagars from the CFA Institute blog published a review of The End of Banking. The CFA Institute is known for its program to obtain the Chartered Financial Analyst credential, one of the most respected and recognized investment designations in the world. We are delighted that the important discussion about how to adapt our financial system to the digital age is picking up pace, also in the financial community.
Stagars’ review starts with a thoughtful and well-written summary of the book, so it is an excellent resource to learn what The End of Banking is about. He concludes that the book “is well researched and is a stimulating, thought-provoking read” and thinks that:
“In addition to carefully explaining how the financial sector maneuvered itself into the financial crisis of 2007–08, it presents several unconventional ideas to do away with regulatory capital arbitrage that sticks taxpayers with the bill for bankers’ risk taking. The book proposes a fairly straightforward policy framework that promises to reduce shadow banking, decentralize financial services from too-big-to-fail banks, improve regulation, and realign the private and the public sector with transparent monetary policy.”
At the end of the review, Stagars rightly cautions on the political and economic challenges to transform the current banking system into a financial system without banking. We are the last to deny that the transition might be a rocky road. But there is one statement in his review we need to discuss further: