Sunday 8 November 2015

What type of investment bank is beneficial to our economies

Investment banks have been blamed for the financial crisis and the image of greedy bankers has been branded in people's mind. I think investment banks and other types of financial institutions are necessary in our economic system. The investment banks and other institutions are the leverages for firms to multiple their capacities and raise more money for investment in order to expand at a faster rate. However, firms do not always make profits and the economy does not perform well. In such case, the investment banks and other institutions should hedge against the risks and limit the losses due to the temporary fall in economic outputs. I never like George Soros, even he is very talented and has many genius ideas. He is successful based on the losses of others. Such strategies cannot gain a long term sustainable growth, and no society likes his strategies either. Investment banks and other types of financial institutions have to share their success with other parts of the economy in order to have more freedom from the central government. Therefore, "good" investment banks and other financial institutions are looking for mutually beneficial opportunities and limit the potential risks.

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