Our prosperity requires the enterprise of innumerable individuals and businesses who exercise their imagination and judgment-and bear responsibility for outcomes. And widespread enterprise is fostered through dialogue and relationships, not merely prices in anonymous markets. Yet modern
finance blatantly neglects these necessary elements for enterprise. In the last several decades finance has become increasingly centralized, distanced, and mechanistic. Instead of many lending officers making judgments about borrowers they know, credit decisions are the output of the models of a few
Wall Street wizards and credit agencies. This robotic centralized finance stifles the dynamism of the real economy and leads to recurring collapses.

A Call for Judgment clearly explains how bad theories and mis-regulation have caused a dangerous divergence between the real economy and finance. In simple language Bhidé takes apart the so-called advances in modern finance, showing how backward-looking, top-down models were used to mass-produce
toxic products. Thanks to excessively tight securities laws and loose banking laws, anonymous transactions have displaced relationship-based finance. And Bhidé offers, tough simple rules for restoring relationships and case-by-case judgment: limit banks--and all deposit taking institutions--to basic
lending and nothing else.

A Call for Judgment is both a primer on the role of finance in a dynamic modern economy, and a cautionary tale about the pitfalls of banks functioning as highly centralized, mechanistic entities. It is essential reading for anyone interested in bringing the economy back to a point at which decisions
can be made that foster organic economic growth without the potentially disastrous risks currently accepted by modern finance.


Binding Type: Hardcover
Publisher: Oxford University Press, USA
Published: 10/07/2010
ISBN: 9780199756070
Pages: 368
Weight: 1.41lbs
Size: 9.30h x 6.50w x 1.00d

Review Citations: Library Journal 10/01/2010 pg. 81
Choice 09/01/2011