No one questions the usefulness of a low finance i

No one questions the usefulness of a "low" finance, i.e. the possibility to use cheques, bank notes and credit cards, rather than put his money in chests, or to borrow, for not having every day, every week or every month to balance its budget.

But what is the purpose of the "high" funds

The traditional definition give economists give three kinds of utilities.

It first allows a large number of investors to pool their money to finance large companies that can achieve economies of scale, possible in highly capitalized sectors of activity. Then, the high finance provides a true forum to fight against the worst abuses of the leaders of large companies. The democracy of the shareholders does not work, but the fear of the CEO to be returned if the course of the shares of their company collapses allows to set a useful constraint.

Finally, the high finance allows diversification of portfolios, necessary for investors seeking high yields without taking the huge risk of personal bankruptcy.

But these are benefits that relate to the ideal world of economists that is of utilitarian players rational, gifted in the calculation of the expected even in times of uncertainty and that programming was no secret. Their world has nothing to do with the world in which we live.

Economists spend their lives to develop theories about how certain features of reality come to to check if we really live in their ideal world, but this is not the case, their theoretical business is of questionable value. It is to explain how it makes an excellent cake of marriage using only honey, baking soda and raw eggplant.

Returning to the world as it is, it includes fast high finance make two other services to the welfare of the community. Incentives to save and invest by promising us to maximize our savings even in extraordinary times. Saving and investing are also a way of luxuriate us in our passion for the game.

It is certain that we are much more happy to save and raise and much more likely to do so, if we believe that this money is available immediately.

And yet put money in the search for Pfizer in Shenzhen factories, or in shopping malls in Atlanta can no longer access immediately. Because the money is only a semblance of availability in the eyes. And yet this feature is maintained only if everyone does not wish to sell at the same time.

And happiness to save is especially strong when our decisions receive responses, positive and negative, in a short period of time sufficient to believe that there will be better next time.

Of course, investors who firmly believe that their money is available and that it is for their benefit exclusively the value in buying and selling, are well naïve. If an emergency occurs, a financial fortune becomes not available so far. When we buy and sell, it is not we that we enrich are specialists and market makers.

This naivety however has some advantages. Psychologically, we sums of a natural forward, then better is lulled us the illusion that our money is safe and that we can build by adept investment transactions, because this illusion finally calm our impatience. Collectively, this illusion will push us to save and accumulate capital and have us believe that wages will increase in turn.

John Maynard Keynes turned seventy-three years on the reform and regulation of financial markets, from the point of view of their three main reasons to be. And himself attempted to make the investment a perpetual and indissoluble, relationship such as marriage... But immediately it reverse, because "any investor in particular boasts that its financial commitments are liquid (what does hold true for all investors taken collectively), which calms his nerves and makes it more prompt to take risks."

In addition, for Keynes, "invest professionally is an obnoxiously annoying and difficult game which has no player fibre; "while one that is provided will have to pay a price in proportion to his penchant".

This is the reason why, whenever we had to consider reform of our financial regulatory system, we have seem paralyzed since one or two generations. And this is why we are still, even when a severe financial crisis.