The finance industry plays a vital role in addressing the world’s most pressing problems. Yet, although there are many studies of finance industry, few that start by asking “what is its purpose”; and therefore few which are aimed at telling us whether it serves that purpose well. Those that do are very challenging; the most definitive, for example, calculates that, as far as the “real economy” is concerned there has been no increase in the productivity of intermediation in over more than a century.

Reflection on how the industry is currently structured can give us clues to this very poor performance, and suggest how we might begin a process of reform. But to do so will mean that we need to move away from the exclusive use of “competitive markets” and “regulation”, which dominate today’s policy discussion.