John Kay

Digital media is the future and two decades from now the book business will look very different.

In the name of free markets, we created a monster that threatens to destroy the very free markets we extol.

The most effective control is other parties’ diligence in assessing the businesses with which they deal.

When the next crisis hits, and it will, the frustrated public is likely to turn, not just on politicians who have been negligently lavish with public funds, or on bankers, but on the market system. What is at stake now may not just be the future of finance, but the future of capitalism.

Regulation as supervision can be simultaneously extensive and intrusive, yet ineffective and prone to regulatory capture. History suggests that supervision is rarely a success.

The assessment of the value of new products is best carried out, not by manufacturers nor regulators but by retailers in close touch with the needs of their customers.

Government underwriting of deposits should be matched by assets of comparable quality. Otherwise the mismatch of risk provides an unjustifiable public subsidy to the banking sector.

The Reform of Banking Regulation
We should spend less time trying to ensure that our regulators can regulate financial behemoths with turnovers bigger than the GDP of many countries and more on trying to redesign the financial services industry so that regulation focuses on the interests of the public as consumers of financial services.
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Do not waste any time on sermons and the prohibition. Even if the Good Lord himself were to deliver the Sermon on the Mount, He would be ignored. Hardened gamblers only give up when they have made the resolution to quit themselves.

If you want to understand how the City came to play such a central role in British economic and political life, why a crash was inevitable, and why the crisis is being resolved on terms which give so much and ask so little of the financial sector, this is the most important thing you need to understand: the influence of investment banks on modern politics and policy.