The Future of Finance

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Prompted by a recent conference at Saïd Business School, Oxford, England, this issue takes the future of finance as its theme. The stage is set by the Sign of Our Time item, The Future of Finance: Structure, Innovation and Ethics, which derives from the event’s programme of a series of speakers, panel discussions and debates covering topics such as regulation and structural flaws, reliance on central bank money, individual and organizational behaviour in financial markets, revolutionary innovations and stability, and the role of ethical failures in the financial crises.

Collated from the conference material, the second piece is a montage that captures well the wide-ranging concern of the organizers. This includes consequences of financial regulation including the shadow banking industry, science, computer trading, the role of human behaviour, structural innovation and the finance industry, access to finance, ethics, and the future of finance.

The second lead article, Start when young, details the last session which featured projects – all presented by young women – that aim to encourage financial literacy on the part of young people. Although one may wonder at the rightness and wisdom of teaching about money too early, there was no doubting the enthusiasm, commitment and effectiveness of the presenters. Even so much depends on the idea of money one imparts. If money becomes understood as something unto itself, then not a lot will be gained, since it is precisely that idea of money that underlines the many ills – even the global financial crisis as a whole – that the projects seek to address.

The feature article is by way of an associative foil. It documents the Air Beneath Your Wings concept, in terms of which the aim is to focus on the role of accounting (especially double entry bookkeeping) as giving a ground, at once moral and scientific, to monetary affairs and on the importance of capitalising initiative when it begins to blossom.

The AEX Page concentrates on a recent exchange between participants concerning a recent initiative in Oregon1 to finance the cost of higher education. Its inclusion serves to highlight that whatever restructuring or ethical commitments emerge from the current financial crises, sight must not be lost of that which supports its existence from the outside, namely the creation of values which are the counterpart to all financial instruments irrespective of their complexity.

Without raising one’s head to meet the gaze and need of the other, one can be left with the solipsistic view that all that really exists is money, especially if represented by the enchanting dancing patterns on a computer screen. However not only can one see the other, but one is seen, for what are the markets, financial or otherwise, if not the sum result of each individual transaction between individuals. If this situation is consistently entered into in full consciousness then what structural supports, technological innovations or moral imperatives are ultimately required?

Victor’s View completes the issue, with its commentary on Value at Risk (VaR), devised by Till Guldimann when at J P Morgan from 1984-96, in order to assess the probability of losses in investment portfolios. Now retired, Guldimann is someone who adds numbers to gut instincts and who believes one can only gauge the future from the past.


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