It is surprising that such an economic individualist as Bruce Crichton should be fond of the collective – the banks (Letters, 23 May). Irrespective of whether or not “the banks” are nationalised or subsidised, individual unethical conduct is unacceptable.
However, what are the “laws of economics” that banks are supposedly being made immune from by state intervention?
Surely not the law of supply and demand, operating through prices by the metaphysical invisible hand. What the Libor and foreign exchange incidents show is that markets are created and operated by individuals.
Moreover, putting it into perspective, the forex market is globally huge with traders handling £3 trillion a day. Also, apart from supplying currencies for businesses, there is the lucrative attraction of hedging and speculation. Perhaps it was the speculative aspect of foreign exchange dealing which tempted a few with large rewards.
Arguably speculation needs tight regulation, as it outstrips currency for business by about three to one.
Old Chapel Walk