John Kay

One of the paradoxes of modern business is that firms have never had so little need of capital or so much involvement with capital markets.

When the Chinese ask how to establish the institutions to support a stable, prosperous economy, it is not enough to mumble: “Property rights and rule of law – go to Denmark and see.”

Trust usually rests on a long-term relationship: the merchant in a foreign bazaar does not expect to deal with you again, and that expectation governs his behaviour.

Casinos attract greedy people with deficient ethics: the fear this engenders frames regulation, the obligations we impose on executives and the culture we expect from operating companies. Perhaps banks should operate to standards as high as those of casinos.

The SNP’s victory in the 5th May elections, which delivered an overall majority of 69 out of the 129 seats, means that the party can now fulfil its commitment to push for a referendum on independence. But independence, if achieved, would bring complications—both political and economic.

So does tentative adolescence give way to independent adulthood? The likely SNP victory does not alter the fact there is no majority in Scotland for independence and little chance of one.

The value of Modigliani-Miller – like any good model in physics or economics – lies as much in the questions it raises as in the truths it reveals.

The theory that the right answer to the gap in information and knowledge between the investment bank’s structured products division and the person in the street is to give the person in the street more information is absurd.

There is a loss of intimacy in knowledge and understanding, and a reduction in subtlety and flexibility of approach that comes from insistence on judicable principles and rigid rules. But the prevalence of regulatory capture is such that it is often a price well worth paying.

Good quangos have specific technical expertise and their purpose is to take issues out of politics. Bad quangos have no distinctive skills and are designed to put issues into politics.