The money trap

Other People’s Money. By John Kay. PublicAffairs; 352 pages; $27.99. Profile; £16.99.

WHAT is the finance sector for? This vital question is all too often forgotten in the debate about the debt crisis of 2008 and its aftermath; it certainly seemed to be forgotten by bankers in the build-up to the debacle. But if the world is to avoid future banking collapses, or at least limit their economic impact, people need to think clearly about the issue.

John Kay’s new book, “Other People’s Money”, does the job; it should be read by everyone concerned with preventing the next crisis. The early books after the crash, like Andrew Ross Sorkin’s “Too Big to Fail”, analysed how the collapse unfolded in minute detail; Mr Kay, an academic and columnist for the Financial Times, takes the longer and broader view.

In doing so, he skewers the pretensions of the finance sector and questions whether its high rewards reflect its true economic contribution. Barely a page goes by without an acute observation or pithy aphorism. “A country can be prosperous only if it has a well-functioning financial...

from The Economist: Books and arts http://ift.tt/1hsuhVB