Banks Are Financial Casinos, Leading UK Economist Says

A new group we20 gathers to discuss ideas for solving the economic crisis, with an eye toward the G20. The group featured a talk by leading UK economist John Kay.

As London approaches the G20 summit this week, with helicopters circling overhead to protect the arriving dignitaries, a new group called we20 invites people to make their own plans for a better economic future that could help solve the global financial crisis. Setting itself apart from other social networking sites, we20 says that plans and ideas submitted to the group’s website will be presented directly to political leaders, including the UK Foreign and Commonwealth office, and it is already drawing attention with being featured on the official G20 London Summit site, in the lead up to the Thursday’s summit. Tonight the group gathered at NESTA's headquarters to hear insight from speakers and brainstorm solutions for the economic crisis. Author and Oxford University professor John Kay, summarized the historic situation of the economic crisis, referring to banks as being “financial casinos.” “Investment banking is the most powerful political lobby in the western world today,” said Kay, “What we need to do is separate the utility that is banking from the casino and bring back boring banking.” He cautioned against over-regulation, and called for more de-regulation of the wholesale financial markets, as well as catching the crooks like Bernard Madoff sooner. His book is “The Long and the Short of It - finance and investment for normally intelligent people who are not in the industry.” Charles Leadbeater, author of We-Think, qualified the economic crisis as that of value, greed and money and one in which “The private sector is incapable of leading recovery, it should come from the public sector.” He called for action toward simplification and for more transparency, and urged leaders to listen to ideas from the margins, because ideas that sounded stupid previously may actually be good now. JP Rangaswami, who pens the blog Confused of Calcutta, and works for BT confessed to formerly being an investment banker, and said:

“I’m looking for community action to lower the chance of failure, knowing that we now live in a much more connected world than before."

Discussions of the w20 evening turned toward social innovation of finance and new approaches to how goods and services are paid for, with models such as Freecycle and Couchsurfing being looked at as examples. Leading alternative currency discussions was Michael Linton and Vinay Gupta tackled the question of eradicating poverty. We20 is a volunteer initiative set up, in part, by London internet lawyer Paul Massey, who said:

“We hope that people can engage with we20 on their own terms. we20 is set up so that people’s we20 meetings and response plans can be directed towards, local, national or global challenges.”

Across London this week, other we20 discussion groups are being held, including a session with the founders of the city’s popular weekly networking group The Tuttle Club.