Financial excesses In the last ten years, we saw a dramatic shift in influence away from entrepreneurship in the real economy to speculation and gambling in the financial sector. The assumption and the hedging of genuine economic risk gradually ceased to be the main concern of international finance. This is the risk that companies face when introducing innovative new products and new processes.
Over time, the creation and assumption of financial risk became the core activity of the financial industry. This is the risk inherent in arbitrage and deliberate exposure to asset price changes. At some point, the financial system seemed to be no longer there primarily to hedge existing economic risks, but more and more to create and propagate risks on its own.