The Financial Services industry exists to make money. After Cadbury, Sarbanes-Oxley...can any new laws effectively curb the industry’s occasional excesses?

David Bloch, CEO of the Brightwater Group comments:

I tend to agree with the results and don’t think the occasional excesses of the Financial Services industry can be effectively curbed.

While I’m not a world expert on the Financial Services Industry, what is plain to me is that like after every new Government Budget, people look for loopholes and new angles to exploit, people in the Financial Services industry will look for their opportunities.

Banks have many people to satisfy and impress. They have shareholders, staff, Fund Managers, the general public etc to look after. With that much pressure and that much opportunity, how can any organisation dare not attempt to develop their business any way they can? Can such hunger, need, occasional greed and honest mistakes be controlled? I don’t think so.

In a previous article I wrote about the only way to truly control the Financial Services Industry as well as many other tools of capitalism, was to change the fundamentals of economics. Take the whole Financial Services Industry Public, create World Banks that control all policy, trade and systems etc. This would surely make for an honest and safe sector, but do we want that? By changing the sector so radically, you fundamentally change the people, style, dynamism, and probably the effectiveness of the industry. Surely it’s the very dynamic, risk-taking style of the sector that has made it so effective for so much of the last 100 years. The sector has produced extraordinary wealth and prosperity and altogether this is a good thing – with the caveat that occasionally a bubble will burst and many people (including recruitment companies like ours) will get hurt and perhaps this is an acceptable consequence of free trade.

Finally then, can anything be done to try and curb the occasional excesses of the Financial Services Industry? Try and stop the individual companies and Banks that step well over the line? Absolutely! Can it and should be controlled entirely? No. France has tried to create a more socialist system of trade and the economy of France has not generally performed as well as the rest of the Western world, although it was interesting to note that in the current recession, France, with growth of just 0.1% last quarter was the high flyer of the major Western economies…