Indeed, Hogan and Pearce state, rather bluntly: “Financial intermediaries live upon imbalances”.9 At one level that is obvious – financial intermediaries or markets exist to transfer resources from savers to borrowers (and back again), which is to say that an imbalance between saving and investment at the level of an individual household or firm in the economy is matched against an equivalent imbalance of opposite sign in some other firm or household.
The theme of this year’s conference is “leveraging technology through turbulent times.” These are, without a doubt, turbulent times. The world is confronting its most serious financial crisis in several generations. The current global financial crisis has certainly been a reminder that not all financial innovation is a good thing.