Financial Wagers, Hyper-Speculation and Shareholder Primacy
During the period that culminated in the financial crisis, the financial wager had risen to a previously unknown prevalence. The wager’s rise to dominance was evident in all financial markets. It was evident in the capital market, in which speculation on the capital gains of shares had risen dramatically. It was equally evident in the credit market, in which the policy of easy money had driven lending volumes to staggering heights, while the relaxation of requirements for loan collaterals had led to a higher tolerance of speculative uncertainty about debtors, and bad credit collaterals were purchased from the banks by speculative investors in the form of structured products. Finally, it was evident in the market for derivatives, in which something like an explosion of wagers on futures and options had taken place.
KeywordsCorporate Governance Capital Market Stock Exchange Hedge Fund Private Equity
Unable to display preview. Download preview PDF.