In an interview conducted by Business Spectator’s Amber Plum on October 17, 2011 with University of Western Sydney associate professor of economics and finance Steve Keen, he makes the following statement:
“SK: If the finance sector was doing what it should be doing, which is simply providing working capital for the non-bank financial sector and businesses and innovation funds for entrepreneurs and so on, in an American case it would mean reducing the size of the finance sector by a factor of four or five. It’s literally that much too big. Of course it would mean large numbers of finance brokers, finance advisers, bank staff, would be out of a job and I’d be shot for it, but the reality is over time that’s going to happen anyway and I’d just be bringing it on more suddenly. But I’d be blamed for causing it.”
In terms of raising capital or providing funding for SME’s the words that are most relevant are ” if the finance sector was doing what it should be doing, which is simply providing working capital for the non-bank financial sector and businesses and innovation funds for entrepreneurs and so on it would mean large numbers of finance brokers, finance advisers, bank staff, would be out of a job.
This ties in well with our previous blog post.
Businesses with a turnover of less than $25 million per annum account for less than 1 % of capital market activity.
As Robert Gottliebsen said in a recent article “For the last century or so stock exchanges have conducted that capital raising function, but these days stock exchanges have been turned into massive casino-style trading houses where capital raising is less than 5 per cent of what they do.”
- Creates jobs
- Grows businesses
- Fosters innovation
