Far Too Big and Politically Connected

Imad A. Moosa
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Imad A. Moosa: RMIT

Chapter 4 in The Myth of Too Big to Fail, 2010, pp 54-80 from Palgrave Macmillan

Abstract: Abstract Financial institutions are no longer, as they are supposed to be, humble intermediaries that channel funds from lenders to borrowers and from savers to investors. This is what students are taught in Financial Markets and Institutions 101, where they are told at the very beginning that financial institutions perform the task of intermediating between deficit units and surplus units. Financial institutions have become the means for a small group of people (bankers, financiers, traders, brokers, financial engineers, etc) to earn fat bonuses and amass huge individual fortunes by taking excessive risk with other people’s money while counting on government bailouts when things go wrong. What they have been doing is a clear manifestation of “heads I win big, tails you lose it all”.

Keywords: Financial Institution; Market Power; Hedge Fund; Average Cost; Credit Default Swap (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-29505-6_4

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DOI: 10.1057/9780230295056_4

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