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Davos and the Cult of Leadership: Professor Harney comments

"Davos has been the scene of a lot of misinformation and disinformation about proprietary trading.  It is not that a ban on such trading among lending banks would prevent all bank failures.  It is rather that it might help to prevent systemic failure by limiting the infection of bad bets and burst bubbles across the whole system.

28 January 2010


"Davos is not the place for an honest discussion of a key failure of regulation: preventing conflict of interest among investment banks, hedge funds, and private equity funds.  The practice of placing bets for your clients, and then betting against those bets yourself, has to be made illegal.  

"Who in a poker game would be allowed to bet not just on his own hand but also on his opponents?  Goldman Sachs and numerous others specialized in such bets.  President Obama's reforms would end this practice, and this is a big reason these reforms were so vociferously opposed in Davos."

Professor Stefano Harney is Deputy Director of the School of Business and Management, Queen Mary, University of London.  He is Chair in Strategy, Culture, and Society, and Founder of Finance Watch.

For media information, contact:

Mark Byrne
Public Relations Manager
Queen Mary University of London
email: m.byrne@qmul.ac.uk
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