"What does society expect from the financial sector?" - Panel discussion remarks by Mr José de Gregorio for the 2012 Per Jacobsson Lecture

I would like to thank the BIS for the invitation to participate in this panel, which makes us look at financial markets from a new perspective. safer and fairer financial systems. The view that financial markets were big casinos, where the betting was done with other people's money and gamblers walked away unpunished, is quite common around the world. Public opinion has been dominated by that sentiment, which has also affected policymaking.

As policymakers, we are used to talking about how the financial system must operate in order to fulfill its goals without threatening financial stability or imposing costs at the aggregate level. In recent years, the discussion has focused on how to avoid excessive procyclicality, contagion, moral hazard, and other important policy concerns.

As economists, we have been trying to explain the misbehavior of financial systems, and we are still searching for answers. Although we may have some ideas, the policy implications are not straightforward, but the answers cannot wait. Policy design needs answers as soon as possible, and delays may cause well intentioned policies to be poorly implemented.

But what society really demands from financial systems is quite difficult to define. Society is a collection of actors, with different interests and different needs. People want access to the financial system at fair conditions. Therefore it is useful to think of society as everyone who is not related directly to the financial industry or policymaking.

Starting from here, we can say that society is demanding safer and fairer financial systems. The view that financial markets were big casinos, where the betting was done with other people's money and gamblers walked away unpunished, is quite common around the world. Public opinion has been dominated by that sentiment, which has also affected policymaking.

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