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Tomorrow’s Finance: Building trust & confidence by changing behaviours in financial services

23rd January 2013 @ 8:00 am - 5:00 pm

Tomorrow’s Finance is a programme of lectures and other events being organised by Tomorrow’s Company in partnership with MAM Funds plc– we are inviting some of the most senior and thoughtful figures from and about finance to consider what is the purpose of finance and is the finance sector fit for purpose? The lectures will be challenging, often controversial, and always stimulating and enjoyable.

We are delighted that John Kay, who chaired the Review of UK Equity Markets and Long-Term Decision-Making which reported to the Secretary of State for Business, Innovation and Skills on the 23rd July 2012, will be giving our fourth Tomorrow’s Finance lecture. 

Over the next year, building on the Kay Review, John will be looking at the economic  contributions made by the financial services beyond equity markets, and we look forward to his early reflections on this topic.

In launching the Kay Review, he stated that only “10% of the population trusted bankers – less even than journalists and politicians.” It is now a question of rebuilding trust and confidence through changing behaviours. Indeed as John said:

“Engagement of quality is based on trust and confidence, and these characteristics are the heart of effective financial intermediation.”  

He will also argue that the largest change now required is not new regulation but a philosophical shift in the way we think about markets. Introducing new regulation merely adjusts a few existing rules and misses the point.

John wants to talk about how markets truly work. Successful financial intermediation is based on relationships and not on hyperactivity, where for instance trading in equity markets has time horizons measured in fractions of seconds.

The financial service’s culture is a large part of the problem.

“People’s behaviour typically meets the expectations generated by the environment in which they operate. Incentives aren’t an alternative to culture; incentives, appropriate or inappropriate, and trust and confidence, or its absence, are the product of the culture of financial organisations.”

He argues that we need to restore some of the relationship based culture that used to exist in the financial services. The bulk of regulation and policy thrusts at the moment are based on improving the integrity and efficiency of trading and miss the relational point. It’s the quality of relationships that matters.

John is currently a visiting professor at the London School of Economics. He also had a career in the policy world which established the Institute for Fiscal Studies as one of the most respected think tanks, as well as a business career. John has published several books including The Truth About Markets (2003), The Long and the Short of It: Finance and investment for normally intelligent people who are not in the industry (2009) and Obliquity: Why our goals are best achieved indirectly (2010).

The lecture and the following debate will interest anyone who is concerned with the future of our financial industry, particularly to those who seek to manage or influence its future.

Tomorrow’s Finance is a collaboration between Tomorrow’s Company and MAM Funds plc. The inaugural Tomorrow’s Finance lecture was delivered by James Featherby, author of ‘The White Swan Formula’ and Chair of the Church of England Ethical Investment Advisory Group where he set out the key arguments of his new publication ‘Of Markets and Men’. This was followed by David Pitt-Watson’s, Chair of Hermes Asset Management Ltd, lecture on ‘Regulation – but is it effective? How to avoid the next financial crisis’. More recently, Matthew Bishop, New York Bureau Chief of The Economist asked ‘How is finance socially useful?’


23rd January 2013
8:00 am - 5:00 pm