It is more than just fairness. If capital markets are seen to be corrupt then capital markets will stop serving their purposes: 1.) allowing investors to defer the right of present consumption into the future (saving for education, retirement, buying a house, a rainy day) by investing in capital goods that increase future productivity, and 2.) increasing the wealth of the country by encouraging the investment in captial goods.
The misallocation of resources by our capital markets (into e.g. derivatives, condo and retail mall development rather then wealth increasing investments) has already run our country into the ground, and now we discover that these same folks were mostly trading for their own accounts?
“If capital markets are seen to be corrupt then capital markets will stop serving their purpose. . .”
The stock exchanges have become casinos for short term speculation, not centers for raising capital to finance long term investments in productive assets. One hundred years ago the equity markets were financing 20 year investments in factories, ships, and railroads. Today computer programs drive security trading allowing traders to skim billions of investment dollars out of pension funds and the 401K’s of average citizens. Stock churning by computer programs does nothing to improve the wealth of the country although it does make many of the partners at Goldman Sachs multimillionaires.
“If capital markets are seen to be corrupt then capital markets will stop serving their purpose. . .”
The stock exchanges have become casinos for short term speculation, not centers for raising capital to finance long term investments in productive assets. One hundred years ago the equity markets were financing 20 year investments in factories, ships, and railroads. Today computer programs drive security trading allowing traders to skim billions of investment dollars out of pension funds and the 401K’s of average citizens. Stock churning by computer programs does nothing to improve the wealth of the country although it does make many of the partners at Goldman Sachs multimillionaires.