Free market vs regulated financial sector

[trophy33]

The documentary has some interesting points:

 

[SkyWriting]

Full Text (Youtube-More-threedots-open transctipt)

00:04 i find it interesting that that corn is is turning for the better but i think it has merited [Music]
00:31 [Music] [Music] [Music] foreign
01:38 day she's [Music] do you also think that your bank cards
02:02 are possessed that finance is a higher force that influences our entire existence [Music]
02:16 well as financial crises continue to strike there is little hope for improvement improvements finance ended up becoming the master of
02:41 the economy not the servant how could you not be angry at the way in which tens of millions of people were thrown
02:48 into misery and unemployment and the banks which guaranteed the incomes of the tinier league were subject to such generous rescue
02:57 evil energies foreign [Music] this is a story of divorce the end of a
03:25 convenient marriage between finance and us the people between banker and citizen somewhere in recent years trust has broken down and we have grown apart
03:36 finance has continued on its way and it is doing well thank you it has never weighed so heavily on the economy billion after billion the amount of
03:45 money put into circulation in markets increases every year on our side more and more of us think that finance's problems are at the heart of all the
03:54 crises we are facing [Music] first came the economic crisis which brought its share of austerity then
04:06 democratic crises which crack our societies and finally the ecological crisis which should hopefully mobilize us all to take action
04:16 it's as though their billions of dollars will never meet our needs as if global finance has cast a spell on our bank accounts and made us dependent
04:25 on its good health when did politics lose control of finance what can explain this feeling of distance and of helplessness against
04:34 financiers but above all are we ready to take on a new crisis [Music]
04:46 let's set off in search of a new finance which is not only possible but essential in order to face the challenges of the future
05:02 the finances team [Music] is the norm victory for the volkswagen football factory unc
06:21 there is no finance without credit and there is no credit without a banker ah the banker this reassuring fatherly figure who watches over our savings and
06:32 always gives good advice here's our money management booklet it'll help you get out of debt keep your budget balanced and assist you to live within
06:40 your income we'll gladly help you with any of your financial problems bring them here to me or write to our
06:46 research department at headquarters thank you thank you sir but that was before the image
07:00 an [Music] boca priscilla society finance in the 20th century became an
07:34 end in itself essentially money started moving in these never-ending loops
07:40 and financies became made money by using money to make more money [Music] is
08:23 in other words it's a crisis in order to better prepare for future crises let's have a look at those of the past the first big financial crisis in
08:35 history one which economists have chosen to remember was the dutch tulip mania in the 17th century it was a speculative crisis just like
08:45 the ones we see today a small group of tulip fanatics got excited about the price of the bulbs and they vowed to buy them at the best price
08:57 soon speculation of their value drove the prices up and up and small bits of paper were worth several cows pigs a mansion or even a boat
09:24 over the next centuries crashes and booms came in quick succession varying in significance and frequency each time the same mechanisms were at work little
09:34 finance wizards invent a new way of making money nobody really pays attention a speculative bubble is formed and hey presto herein lies the crisis
09:44 this takes us to the 1929 crash and the so-called great depression which brought about its own consequences unemployment poverty war in order to re-establish
09:55 citizens trust us president roosevelt took historic measures and supervised banking and financial activities and so that is how we found the remedy
10:53 for all of the financial crises to come and how there were never anymore the world lived in stability and prosperity until the end of time
11:03 ah no sorry hold on in 2008 it happened again a new worldwide crisis loans granted on mass lawmakers turning a blind eye bubbles bubbles bubbles and
11:16 poof a new stock market crash which no one saw coming what was happening in finance before 2007 was that you had a tiny tribe of specialists
11:26 who controlled a technology that nobody else understood to do with the repackaging of financial instruments and because they had sole control of
11:40 this technology and this knowledge and because they spoke a language which was completely uncomprehensible to anyone else i used
11:49 to say they spoke financial latin like the priests in the medieval catholic church and because this language and this knowledge was making them very rich
11:58 they became incredibly arrogant and incredibly dominated by what i call tunnel vision they simply couldn't see out of their tiny little worlds and
12:08 couldn't see the consequences of what they were doing [Music] rest assured we're not going to tell you
12:23 how securitization has enabled traders to issue cdos and cdss thanks to spvs by investing in highly rated collaterals that eventually collapsed the subprime
12:34 mortgage sector amen rather let's try to understand how we ended up there how we allowed these young wolves of wall street to do more or less what they
12:42 wanted for 40 years even the most progressive lawyers whether in legal academia or in law firms or the students that we teach
13:19 for a long time have fallen for the belief so so the the goal was to make markets more efficient the goal was to ensure that shareholders and
13:26 corporations can really control what's going on and so if you give them all the right incentives then the right outcome will happen so
13:52 an example of this irrational finance has been seen during the subprime crisis where when left to its own devices the finance sector takes enormous risks and
14:02 endangers our economies and jobs without even realizing it in the united states and europe two places particularly affected by the
14:12 financial crisis the culprits are left trembling while citizens eagerly wait to find out their fate and the politicians who allowed it to happen make promises
14:22 we brought the global economy back from the brink we laid the groundwork today
14:29 for long-term prosperity as well long-term prosperity is an ambitious claim most importantly we were promised that finance would be better regulated a
14:38 ban on transactions deemed too risky and obliging banks to keep money aside in case of running into trouble since then the general public has rediscovered the
14:47 central bank's role as firefighters in times of crisis to save the banks in order to save ourselves so that in an emergency everyone brings out the trusty
14:56 old money printer the us federal reserve was the first example of this and its effect on the markets reinvigorated the economy
15:36 associated in europe the european central bank can only lend massive amounts of money to banks that no longer trust each other
15:48 but this wouldn't be enough the already weakened european banks were going to face a new period of instability a few years later
15:57 in europe situations [Music] [Music]
16:51 mario draghi also known as super mario called time on the financiers he sent out a scathing warning to all those speculating the bankruptcy of european
17:01 states and thus on the end of the euro within our mandate the ecb is ready to do whatever it takes
17:12 to preserve the euro and believe me it will be enough people do whatever it takes to stop
17:38 [Music] objective [Music] so to sum up after the crisis we spent
18:35 money a lot of it to hurriedly save banks and then we injected money into the financial markets for a long long time
18:44 [Music] and what came of it you would expect that these measures would revitalize the economy in the long term but the exact
18:54 opposite has happened uh government debts soared as a result of the crisis central bank balance sheets will never look the same again
19:02 interest rates have plunged to zero we have the threat of is it where the zombification of a large part of the corporate sector which is being kept
19:10 alive by extraordinarily low interest rates and growth rates and productivity rate growth rates have all fallen very considerably since the early 2000s and
19:19 really quite dramatically since 2008 and so we're left with this deeply uneasy sense that we don't really quite understand the world that we're in we
19:28 know it isn't the apocalypse but quite what kind of a world it is is is very unclear [Music]
19:36 perhaps it is not an apocalypse but it's not far off to the point where the fear of another crisis is making headlines again today
19:46 radical uh [Music] the average citizen however feels like
20:41 the real loser their money has saved the banks but they haven't really felt any profit from it [Music]
20:51 the losers are the populations of europe and the united states which suffered the immediate effects of the fallout the 10 to 11
21:00 million american families that lost their homes this is the largest forced movement of americans since the
21:06 dust bowl of the 1930s and in the eurozone even more acutely the millions of people who were driven into unemployment between 2008 and 2013 2014
21:18 and where government policy really failed to respond in a way which would have enabled them to escape that situation
21:29 [Music] why is finance still so unstable today despite these repeated crises why have regulators failed to permanently
21:53 stabilize a system which can put the planet's economy in danger overnight [Music] by shining a spotlight on banking
22:04 activity an entire sector of the financial industry has been overlooked it is the industry's most impenetrable [Music]
22:53 shadow finance it is exactly what you think businessmen who pass on money and financial products under the counter out of sight except that doesn't happen in
23:03 plain sight on your doorstep and under your nose follow the guide [Music] today since we're feeling a little
23:27 curious let's explore these shadow networks a treasure hunt for financial packages that help organize tax evasion for businesses and individuals and it
23:38 can all be found without leaving the big european cities of paris berlin amsterdam and brussels it's a real touristic circuit organized
23:58 by a group of artists from all the data published on the subject [Music] [Music]
24:41 [Music] we are in a world where anybody can choose to set up let's say a corporation in the country or legal system of his or
24:59 her choice i can set up a corporation in the cayman islands because i may want to avoid paying taxes and that corporation even though it's a
25:08 cayman island corporation will be accepted as a corporation with all its privileges almost in any other country around the world and so we have this
25:17 disjuncture between democracies that create their laws and try to self-govern through law and private parties that can pick and
25:26 choose the legal systems from different countries to advance their own private interests when the stories about the panama papers
25:34 were published they were published by a collaborative of journalists around the world in a way that anybody could access and
25:41 see and the sheer transparency around that and the naming and shaming appears to have actually increased the
25:48 pressure among governments to clamp down on tax tax havens and the sense of shame that many
25:55 companies and individuals feel about putting their money into tax havens despite efforts to increase transparency over the last few years the rising
26:04 amounts of money being transferred via the shadow finance industry remain colossal and are constantly increasing these are sums which mainly pass through
26:13 tax havens less and less of those and more and more of these opacity allah foreign
26:30 one of the ironies of what's happened in the last decade is that the shallow banking sector was a crucial reason why the last financial crisis happened and
26:38 essentially you'd think that because of that in the years after the crisis regulators would have shut down the shadow banks
26:45 and there was some decline initially but in reality the shallow banks are actually in some ways becoming more not less important
26:54 why are we unable to put an end to the abuse of this snowballing finance why do the financiers keep winning in the face of legislators
28:14 um in brussels alone there are three times more finance sector lobbyists than parliamentarians solely to represent
28:42 financial interests not to mention that a large number of them are directly recruited within these administrations for a high price and are therefore
28:50 already perfectly familiar with the inner workings of power is let's be honest as citizens we often
29:50 blindly accept what experts tell us as the truth why is being interested in finance so complicated and why is it so difficult to revisit this field which
30:00 has been abandoned by so many of us for so long and above all where do we start response to recently new ways of talking finance
30:31 have begun appearing by emphasizing imagination and performance these new terms respond to misunderstanding and anger and remove any blame from citizens
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[trophy33]

The main point (backed by some historical experience) seems to be that unregulated financial sector takes too much risks and that brings financial crisis. And in such a crisis, common people loose jobs or savings, but banks get saved by governments.

Financial sector constantly tries to get rid of regulations and state control and/or invent various strategies how to exploit holes in legislation, to be able to risk people's money in speculative assets.

Average citizens should be more aware of what their banks are doing with their money and change the bank if they find unethical behavior.