The financial industry has had its share of bad press in recent years.
As the global economy struggles with sluggish growth, the financial sector is being singled out for criticism for its failure to predict the recession, the inability to predict an economic downturn and its role in fueling financial bubbles.
But as the financial markets recover, some economists have begun to acknowledge that the financial system has been playing a role in exacerbating economic conditions.
The Financial Times’ James Flanders says that while some of the criticism is justified, the evidence suggests that the industry should be given a pass because it is the sector that has the most to gain from its position.
“The industry’s performance has been pretty poor in terms of making predictions, making predictions that are often right, but not the ones that actually matter,” Flanders told Business Insider.
“There are a number of problems that the sector is responsible for, and the industry is really not the one responsible for that.”
Flanders said that he and other economists who have studied the financial crisis argue that the public should be more concerned with the industry’s role in creating bubbles, rather than focusing on the industry itself.
“I think that the debate over what the financial sectors role is is not really that important to the public, it is important to policymakers,” he said.
“It’s interesting because a lot of the people who are complaining about the financial market are also the people that are trying to do some of these things that are going on in the private sector.”
Flanders and other critics of the financial services industry argue that a lack of focus on the sector’s role is creating more bubbles and more problems for the financial systems, rather then less bubbles and less problems for society as a whole.
“If you have the wrong sort of focus, then you can create more bubbles, and that creates more instability,” he added.
“We can’t have the whole world running around with bubbles.
We have to have the market work in an environment where bubbles are not created.”
Falling commodity prices and the resulting recession in the US are also cited as some of Flanders’ primary arguments for the industry to be given more attention.
But Flanders also noted that while the industry has not played a central role in the global economic crisis, it has been one of the major culprits for some of its biggest problems.
“They’re both important issues that are relevant to the economy,” Flander said.
“But I don’t think that’s the issue.
That’s the question we need to be asking ourselves.””
The financial industry plays a major role in a lot a lot the problems that we have seen in recent times, and I think we need a lot more focus on that.”
For Flanders, the argument that the banking sector is the culprits of the crisis is a fair one, but he said that there needs to be more attention paid to the role that financial services plays in other sectors.
“One of the problems in the financial world is that they don’t talk about what the banking system is doing to make sure that people have money to get through the crisis,” he told Business Today.
“So I think that that should be an area of conversation for policymakers and the public at large.”
While the financial companies have received a lot for their efforts in combating the financial crises, they have also suffered in the process.
The financial crisis of 2008 hit the financial industries hardest because of the way they were able to create money out of thin air.
The financial sector was able to generate a great deal of wealth by manipulating the financial environment, creating huge bubbles and other financial problems, and then creating the illusion that these bubbles would eventually burst.
The financial markets are still dealing with the aftermath of the 2008 financial crisis, with billions of dollars of losses in the banking industry and many of the industry employees have had to retire.
But Flander says that he believes that a financial sector that was more focused on the economy should not be blamed for the crisis.
“In a crisis, you have a lot less of a sense of responsibility for the outcome, and it’s the result of the economic environment that led to that crisis,” Fels said.
Flanders noted that there are a lot different types of problems in other industries, but that the issue is that there is a lack to focus on one particular industry in the public’s eyes.
“You don’t have to focus a lot on one industry to have problems, because there are other industries out there that are also struggling and that are contributing to those problems, but they’re not being looked at by the public as the cause of the problem,” he explained.
Falls in commodity prices in recent months have also put a spotlight on the financial service industry, with analysts estimating that the losses from the collapse in oil prices have already cost the industry $US10 trillion.
However, Flanders argues that the overall economic situation has improved