It was noted in the introductory chapter that the ‘Academic’ workshop in October 2013 had concluded with a panel discussion chaired by Andy Mullineux who acted as rapporteur. First, Tom Sorell explained the ‘ethics’ workstream of the AHRC ‘FinCris’ project and argued that banks, as financial intermediaries, should be considered part of Rawls’s (1971) ‘basic structure’ of society, and regulated by principles of social justice. As such, they are akin to public utilities providing money transmission, or payments, services and other basic banking services (safekeeping of funds, statements of account, and so on) to retail and commercial customers. Another panellist, Charles Calomiris, intervened to point out that banks and the wider financial system were primarily responsible for allocating capital, which, in the case of banks, was gathered largely through deposits. The more efficiently the banking system was regulated, the more productive would be the capital allocated and the better the performance of economics. Sorell drew a distinction between ‘good’ intermediation, lending for ‘productive’ use, and ‘bad’ intermediation, lending to fund arbitrage and speculation and other non-productive activity in pursuit of short-term profits. Sorell acknowledged that financial derivatives were potentially useful if employed for hedging risks, rather than speculation and that bankers’ trading bonuses needed to reward successful hedging of risks, rather than speculation.
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