*** HUBERT BONIN, CARLO BRAMBILLA (Eds.): Investment Banking History. National and Comparative Issues. Presses Interuniversitaires Européennes / Peter Lang (1 av. Maurice, B-1050 Brussels. Tel: (41-32) 3761717 - Fax: 3761727 - email: pie@peterlang.com - Internet: http://www.peterlang.com ). Euroclio series, No. 78. 2014, 532 pp, €66.30. ISBN 978-2-87574-115-8.
For at least the last six years, merchant bankers have not had a good press and the world of academia has been less than kind to them too. This comes as no surprise given that they are among those most guilty for the cataclysmic crisis the world is still reeling from and the avarice of these white-collar “sharks” has known no bounds and is described by certain quarters as being responsible for shaking “the fundamentals of capitalism and even of the market economy.” Don't count, however, on the historians and economists contributing to this book to add to this escalation. The two editors of the book are also quick to point out that there is nothing in their nature to predispose the “financial and investment banks” (a less simplistic and more accurate definition than merchant banks) to become the vectors of the crash, which was due only to“structural and operational changes in the financial industry that increasingly weakened global capitalism because they did not provide for protection nets and disincentives to adopt hazardous behaviours and to build major conflicts of interests, finally resulting in huge information asymmetries.”
Readers partial to a public pillorying should look away now because this scientific book is not for them. Rather, it is for people (be they laymen or experts in the field of banking) who are trying to gain a better understanding of how we got to this stage. And why we got to this stage. In this domain of activity, where secrecy is rife and the imagination is easily stoked, nothing beats the approach of historians keenly interested in economics when it comes to painting a credible backdrop. The huge merit of this book is that it demonstrates the diversity of investments banks and the extent to which their strategies evolve over time and adjust to the various contexts, circumstances and institutional frameworks at play in a specific time and place. Clearly, one of the first lessons of the book is that there is no particular business model that applies to all investment banks across the board. The contributions also reveal, and this is one of the changes in this particular model of the banking world in all its variations, the ever growing gulf that has opened up between the real economy and finance, which has led, explains Hubert Bonin (Sciences Po Bordeaux) and Carlo Brambilla (Insubria University in Varese, Italy), to a “shorter investors' time horizon.” In the fifteen essays in the book, we discover that investment bankers are often perfectly respectable people - such as Paul Warburg of Germany, who was the real promoter of the US Federal Reserve - and they remain indispensable for a properly functioning market economy, as long as they remain within certain ethical limits…
What are the differences - and the areas of convergence - between the different investments banks and the so-called retail banks - which sometimes like to play on both stages, sometimes to excess? Do the first play a key role in the structuring of their country's economy and if so, do they have a “historical function” in the national banking system? “What was their 'historical usefulness' or even 'necessity' as a leverage to growth?” These are some of the many questions to which the authors provide enlightening answers throughout the book, through research that leads, for example, from investment for the Salonika-Constantinople railway line during the Ottoman Empire and the Baring crisis to the work of investment banks throughout history in countries like the Netherlands, France, Italy and Spain, along with Bulgaria and Russia. All these approaches are of great scientific value and lead Hubert Bonin to point out, in the more personal conclusions, that the answer to the question of the type of risk that investment banks should assume if they are to learn from the last crisis is rather disturbing. He says that although “we know that even though historians are fond of dreams, businesses and banks appear impervious to the lessons of history…”
Michel Theys
*** ANDRE ICARD: Using the Special Drawing Rights as a Lever to Reform the International Monetary System. Einstein Center for International Studies (26 via Schina, I-10144 Turin. Tel/Fax: (+39-011) 4732843 - Email: info@centroeinstein.it). “The Federalist Debate Papers,” No. 1. 2014, 16 pp.
In October 2010, a very high-level group of eighteen former ministers, governors, high-ranking officials and managers of international bodies began an in-depth study of the international monetary system, chaired by Michel Camdessus, Alexandre Lamfalussy and the late Tommaso Padoa-Schioppa, with the aid of the Triffin International Foundation. The group presented its report and eighteen practical suggestions in February 2011 to the president of the G20 ahead of the G20 summit in Cannes in November of that year. Unfortunately, leaders' attention would focus on the explosion of the sovereign debt crisis rather more than on this report. Commenting that the report makes little mention of special drawing rights, the Triffin Foundation decided to organise a working group on special drawing rights, chaired by André Icard, former deputy director general at the Bank of International Settlements. His report is published in this booklet, which confirms the unsound foundations of the international monetary system and, noting that it will not be possible to quickly establish a multilateral reserve currency, makes nine suggestions for improving the situation. (MT)
*** GEORGE CHOBANOV, JÜRGEN PLÖHN (Eds.): Crisis and Sustainability: Responses from Different Positions. Peter Lang (1 Moosstrasse, P.O. Box 350, CH-2542 Pieterlen. Tel: (41-32) 3761717 - Fax: 3761727 - Email: info@peterlang.com - Internet: http://www.peterlang.com ). "Sofia Conferences on Social and Economic Development in Europe" series, No. 4. 2013, 152 pp, 39.95€. ISBN 978-3-631-64062-3.
This book provides an account of the fourteenth conference organised by Sofia University's economics and business administration faculty, which was held in October 2011. Various aspects of the ongoing crisis are addressed, particularly monetary issues. Corbett Gaulden looks from the point of view of an American at fiscal aspects of the European debt crisis, paying particular attention to the relationship between short-term social welfare and long term fiscal policy, which he says explains the crucial role played by political leaders. George Chobanov and Teodor Sedlarski use a mathematical formula (some pages of their short study will therefore not be understood by laymen...) to demonstate that social justice depends on crucial intervention from pooliticians in the economic process: clearly, economic Darwinism or the survival of the fittest is not the path to follow for anyone worried about society as a whole. Swiss researcher Jean-Pierre Gern (of Neuchâtel University) is no happier to accept market economies' neoliberal excesses, and even goes as far as challenging the desirability of unrestricted growth of advertising and the production of goods that serve “artificial needs.” The other two parts of the book, on European economies and European policy areas and sustainable development, are in a similar vein, written by economists convinced of the merits of a market economy… as long as some marker cones are placed along the way. (PBo)
*** YANIS VAROUFAKIS, JAMES K. GALBRAITH, STUART HOLLANDE: Une proposition modérée pour le règlement de la crise de l'euro. Editions Potamos (48 rue Xenokratous, GR-10676 Athens. Tel: (30-210) 7231271 - Email: info@potamos.com.gr - Internet: http://www.potamos.com.gr ). 2014, 96 pp, €9. ISBN 978-960-545-038-0.
This book is an innovative and daring collection of essays that is simple in context and modest in formulation. It makes a four-pronged proposal for solving the euro crisis. The authors do not neglect the strong social and humanitarian dimension of the euro crisis, which is bringing people and countries to their knees and seeing dangerous nationalism prospering and threatening the very existence of “Europe of the nations.” The authors argue that the crisis is being reinforced by the application of the very measures taken to tackle it, measures whose leaders tell us are the only way to get out of the crisis. The authors say this is a serious error. The problem for European politicians is that this diagnosis is pronounced by three globally renowned economists: Yanis Varoufakis, who lectures in the theory of economics and political economics at Athens University, along with the American, James K. Galbraith, and British economist Stuart Holland, who lectures at Coimbra University in Portugal. Through their crisis exit-proposal, they aim to show the peoples of Europe that there are reasonable alternative ways out of the crisis that are effective and less difficult to bear. Clearly, their arguments are weapons they are offering European citizens so that they can hold their leaders to account. The authors start by analysing the nature of the European crisis that is at one and the same time a bank crisis, a debt crisis, an investment crisis and a humanitarian crisis. They then study in a highly critical manner the binding policies implemented and the political errors committed so far, with chapters on the dominance of budgetarily virtuous member states, the European Central Bank's rejection of monetary financing of debt, the rejection of pooled responsibility for debt through the issuing of euro-bonds and the avoidance of federalisation of the European Union. These 'modest' proposals aim to remedy all these impasses… (AKa)
*** GEORGE KYRTSOS: Indignez-vous mais osez! Proodeftikes Epikoinonies (74 Spyrou Merkouri, GR-11634 Athens. Tel/Fax: (30-210) 3506325 - Internet: http://www.proodeftikesepikoinonies.gr ). 2013, 659pp, €14.90. ISBN 978-618-80714-0-7.
How can the Greeks get out of the social and economic crisis caused by the excessive debt taken out by their government over the years? How can they escape from the 'trap' of memorandums after three years of failed experiences? How can they reduce selfish waste of public money and curb the continued triumph of big interest groups at the expense of the public interest? How can they correct the University (which backed economic collapse) to the advantage of a new generation that is the first victim of that collapse? How can they put a brake on the crumbling of the productive private sector? How can they reduce the overall cost of the Republic and the gap that separates them from politicians? How could they take advantage of the opportunities offered by the European crisis without isolating their country both politically and economically? These are some of the questions that economist George Kyrtsos tries to answer. He is a journalist who became an MEP in the recent European elections. Admitting that there are no easy-fixes, he says citizens are right to express indignation at the intolerable situation forced upon them, but urges them not to give way to facile populism, which acts as a shield for the people who are largely responsible for the crisis. In his view, it is only by giving a creative dimension to the legitimate indignation of citizens that a new economic and social dynamic can be developed that will get the country out of this deadlock. The author therefore invites readers to roll their sleeves up further to deal with the crisis and, at the same time, to isolate the various political and economic figures responsible for the country's collapse (AKa)
*** COSTAS VERGOPOULOS: "Le noir et le rouge". La génération perdue Grèce-Europe. Editions Livanis (98 Solonos, GR-10680 Athens. Tel: (30-210) 3661200 - Fax: 3617791 - Email: webmaster@livanis.gr - Internet: http://www.livanis.gr ). 2014, 336 pp, €14-50. ISBN 978-960-14-2831-4.
Whilst money, banks and stock markets triumph, communities are shattered, social exclusion is mushrooming and young people are the first victims of the crisis in all the countries of Europe. Professor of political economy at Paris 8 University, Costas Vergopoulos looks in this book at the future that is being prepared without them. Will it be a future that brings productive work and social cohesion, initiative and innovation for a better world? He answers in the negative because the author says that unlike the rest of the world, Greece and Europe are not preserving jobs, but saving banks and financial returns by forcing the next generation to bear the costs. The author says that Greece, the 'weak link' in the European chain, was selected as a guinea pig for the downgrading of communities. It is therefore in Greece that the countdown has started. Mind you, says the author with relative optimism, history shows that in every episode of making a break from the past, the 'losers' write history and the 'winners' lose… (AKa)
*** GEORGE KATROUGALOS (Ed.): Les inégalités et le droit. Les inégalités sociales de la Grèce moderne. Editions Alexandria (133 Solonos, GR-10677 Athens. Tel: (30-210) 3806305 - Fax: 3838173 - Email: alexpubl@alexandria-publ.gr). 2014, 198 pp, €14.91. ISBN: 978-960-221-613-2.
The phenomenon of inequality is becoming ever more evident in the context of the big proteiform crisis that has been ongoing for a number of years both in Greece and elsewhere in Europe. The crisis largely arises from a tectonic shift in which the State is losing its power to control the markets as part of a transition to a neoliberal model of virtually total liberation of the economic sphere. It goes without saying that these changes have implications for law and institutional structures, notes George Katrougalos, a lawyer, expert in constitutional law and professor of public law at Democritus University in Thrace. In the book, this human rights specialist recently elected to the European Parliament explains that the current process of modification is incompatible with the protective frameworks established by post-war constitutions, which were infinitely more positive for workers. The book's subject matter is the form taken by this conflict. The author says that the combination of a theoretical approach and an analysis of particular cases encourages study of the legal problems connected with the introduction of the principle of equality and related rights. (AKa)