Regulation and Market Efficiency
Back to Basics Series (1) (Picture : Léon Walras 1834 - 1910) "PARIS -(Dow Jones)- French Prime Minister Francois Fillon said Friday (January 9th, 2009) the next G20 summit on financial regulation must yield concrete measures and that no market segment or entity should escape regulation in the future." "Financial markets must be regulated!"; behind this current unanimity and dominant thought, can't we recognize the troubling signature of "The Market" itself? Isn't it another expression of its powerful strength to make opinions converge as well as to erase discordant or more complex statements? As John Maynard Keynes used to say : "Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally". A majority of market actors wanted to access the high-with-apparent-low-risk subprimes returns. When everything goes wrong the same majority is calling for more regulation. Regulation or deregulation...