Other People's Money: The Real Business of Finance by John Kay

Awards & Accolades

3.9/5 Stars on Goodreads

• A Financial Times Book of the Year, 2015
• An Economist Best Book of the Year, 2015
• A Bloomberg Best Book of the Year, 2015

Synopsis

The finance sector of Western economies is too large and attracts too many of the smartest college graduates.

Financialization over the past three decades has created a structure that lacks resilience and supports absurd volumes of trading. The finance sector devotes too little attention to the search for new investment opportunities and the stewardship of existing ones, and far too much to secondary-market dealing in existing assets. Regulation has contributed more to the problems than the solutions.

Why? What is finance for?

John Kay, with wide practical and academic experience in the world of finance, understands the operation of the financial sector better than most.

He believes in good banks and effective asset managers, but good banks and effective asset managers are not what he sees.

In a dazzling and revelatory tour of the financial world as it has emerged from the wreckage of the 2008 crisis, Kay does not flinch in his criticism: we do need some of the things that Citigroup and Goldman Sachs do, but we do not need Citigroup and Goldman to do them.

And many of the things done by Citigroup and Goldman do not need to be done at all.

The finance sector needs to be reminded of its primary purpose: to manage other people's money for the benefit of businesses and households.

It is an aberration when the some of the finest mathematical and scientific minds are tasked with devising algorithms for the sole purpose of exploiting the weakness of other algorithms for computerized trading in securities.

To travel further down that road leads to ruin.

About the Author: John Kay

John Kay is a prominent British economist.

As well as a Financial Times columnist and author known for his insightful writing on economics, finance, and business. He is a visiting professor at the London School of Economics, a fellow of St John's College, Oxford, and a regular contributor to the Financial Times.

Kay's career spans academia, consulting, and company directorships, and he is recognized for his ability to explain complex ideas clearly.

Background and Accomplishments:

Education and Career:

• Academic Background: Educated at the Royal High School, Edinburgh University, and Nuffield College, Oxford.
• Fellow of St John's College, Oxford: A long-standing member since 1970.
• Established the Institute for Fiscal Studies (IFS): He served as research director and director, transforming it into a leading think tank.
• Founded London Economics: A consulting business that grew into a major force in economic consulting.
  • Held chairs at London Business School, the University of Oxford, and the London School of Economics.
  • First Director of the Said Business School at Oxford University.
  • Fellow of the British Academy and Royal Society of Edinburgh.

Author and Columnist:

Financial Times Columnist:

A regular contributor, known for his insightful analysis of economic and financial issues.

Author of numerous books:

Including The Truth About Markets, Obliquity, The Long and the Short of It, and Other People's Money.

Recognition for his writing:

His work has been recognized with awards and accolades, including the Senior Wincott Award for Financial Journalism.

"The Corporation in the Twenty-First Century":

His most recent book explores the changing role of corporations.

Key Themes in his Work:

Focus on the relationship between economics, finance, and business: He examines how economic principles impact corporate behavior and financial markets.

Critique of traditional economic models: He often challenges assumptions about rational choice and corporate selfishness.

• Emphasis on the importance of understanding and navigating uncertainty: His book Radical Uncertainty explores this theme.
• Advocates for a more responsible and sustainable approach to finance: He challenges the status quo in the financial industry.