The Purpose of Finance

The financial system has a special place in the market economy: it is in many respects the spider in the web. When the system collapses, as it did in 2008, it affects the entire economy overnight. This central role makes the financial sector by far the most regulated economic sector. Yet it remains unclear whether all this regulation has helped us to create a sector that delivers what we expect from it.

What is it that we expect from a financial system? In order to answer this question it is crucial to establish the purpose of finance. Fundamental reflections on the duties, responsibilities and role of the financial world are necessary in times of crisis. How much solidarity must banks adopt when dealing with the corona crisis? Is there a trade-off between social and financial stability? Which projects should be financed? Which obligations do financial institutions have towards which stakeholders? Should the social and environmental impact of investments be measured and communicated to clients, and if so, how? In short: how can the financial sector add value and be of service to the real economy? 

To take on these fundamental reflections, David Pitt-Watson (University of Cambridge) will give a lecture on ‘the purpose of finance’. Luc Van Liedekerke (University of Antwerp) will make a short opinion statement, followed by the responses of Frank Vanaerschot (FairFin) and Tom Van den Berghe (Febelfin).  Afterwards, there will be room for discussion.

The Purpose of Finance Report 2017