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this article. I know your wisdom knows no bounds, hence it's automatic to ask you. Please give objective counter arguments, where you see fit. Thanks.
<TABLE cellSpacing=0 cellPadding=1 width="100%" border=0><TBODY><TR><TD><SPAN class=TopStory>Why financial markets require regulation</SPAN>
<SPAN class=Subheadline></SPAN></TD></TR><TR><TD>Dennis Morrison
Sunday, February 18, 2007
</TD></TR></TBODY></TABLE>
<P class=StoryText align=justify>I am flabbergasted that people who hold important positions in the body politic and who should know better have been guilty of outbursts castigating our financial regulators for turning their faces against money handlers operating outside of the law.
<TABLE cellSpacing=0 cellPadding=5 width=70 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>Dennis Morrison </SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>There ought to be no doubt that a modern economy hinges fundamentally on its financial system. Without a sound financial system, confidence to undertake any transactions by investors, savers, and the population in general would disappear. This is why so much effort is made by countries to have their financial systems properly regulated.<P class=StoryText align=justify>Money serves as a store of wealth/savings, which means that financial assets and those who manage them are of great importance. This is why financial institutions and their managers are licensed, and there are criteria that are applied. One notable criterion is that of fit and proper person. There can be no compromise in applying the rules and regulations governing our financial system, since it is the guardian of monetary transactions in Jamaica. Moreover, we would soon find ourselves disconnected from the rest of the world were we to allow our system to get out of control.<P class=StoryText align=justify>Internally, the willingness of individuals and companies to do business with each other without resort to cash or even barter rests upon the confidence in our financial system. The same thing applies externally in terms of our trade with the rest of the world. Jamaica has had brushes with failing institutions and the drying up of credit for international transactions. From these experiences, we should have come to appreciate the merit of vigilance on the part of regulators.<P class=StoryText align=justify>The banker, securities dealer, the stockbroker, money market broker, the commodity trader, and so on, all act as agents of other people, be they depositors, investors, or other clients. In other words, they take deposits from the public or money to invest on their behalf, or they undertake to carry out trades. This feature sets them apart from ordinary business people. In the words of David Ricardo, "The distinctive feature of the banker begins as long as he uses the money of others; as long as he uses his own money, he is only a capitalist".<P class=StoryText align=justify>That is the fundamental distinction that is being missed by those who say it is okay for anyone to set up shop, take funds from the public, and invest them in foreign exchange or any other trading activity, including commodities. All will be well where super returns are made, but the autoclaps comes when people lose their money. Invariably, the state gets drawn into the picture and the losses are socialised. Recognising the risks of moral hazard, financial authorities worldwide have therefore to be rigid in licensing and regulating dealers in the various markets.<P class=StoryText align=justify>Where business people choose to invest their own funds they face the risks and they stand to lose their money put into foreign exchange or other trading, whether online or not. But even in these cases, there can be risks to the system, depending on how the funds have been sourced. For
<TABLE cellSpacing=0 cellPadding=1 width="100%" border=0><TBODY><TR><TD><SPAN class=TopStory>Why financial markets require regulation</SPAN>
<SPAN class=Subheadline></SPAN></TD></TR><TR><TD>Dennis Morrison
Sunday, February 18, 2007
</TD></TR></TBODY></TABLE>
<P class=StoryText align=justify>I am flabbergasted that people who hold important positions in the body politic and who should know better have been guilty of outbursts castigating our financial regulators for turning their faces against money handlers operating outside of the law.
<TABLE cellSpacing=0 cellPadding=5 width=70 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>Dennis Morrison </SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>There ought to be no doubt that a modern economy hinges fundamentally on its financial system. Without a sound financial system, confidence to undertake any transactions by investors, savers, and the population in general would disappear. This is why so much effort is made by countries to have their financial systems properly regulated.<P class=StoryText align=justify>Money serves as a store of wealth/savings, which means that financial assets and those who manage them are of great importance. This is why financial institutions and their managers are licensed, and there are criteria that are applied. One notable criterion is that of fit and proper person. There can be no compromise in applying the rules and regulations governing our financial system, since it is the guardian of monetary transactions in Jamaica. Moreover, we would soon find ourselves disconnected from the rest of the world were we to allow our system to get out of control.<P class=StoryText align=justify>Internally, the willingness of individuals and companies to do business with each other without resort to cash or even barter rests upon the confidence in our financial system. The same thing applies externally in terms of our trade with the rest of the world. Jamaica has had brushes with failing institutions and the drying up of credit for international transactions. From these experiences, we should have come to appreciate the merit of vigilance on the part of regulators.<P class=StoryText align=justify>The banker, securities dealer, the stockbroker, money market broker, the commodity trader, and so on, all act as agents of other people, be they depositors, investors, or other clients. In other words, they take deposits from the public or money to invest on their behalf, or they undertake to carry out trades. This feature sets them apart from ordinary business people. In the words of David Ricardo, "The distinctive feature of the banker begins as long as he uses the money of others; as long as he uses his own money, he is only a capitalist".<P class=StoryText align=justify>That is the fundamental distinction that is being missed by those who say it is okay for anyone to set up shop, take funds from the public, and invest them in foreign exchange or any other trading activity, including commodities. All will be well where super returns are made, but the autoclaps comes when people lose their money. Invariably, the state gets drawn into the picture and the losses are socialised. Recognising the risks of moral hazard, financial authorities worldwide have therefore to be rigid in licensing and regulating dealers in the various markets.<P class=StoryText align=justify>Where business people choose to invest their own funds they face the risks and they stand to lose their money put into foreign exchange or other trading, whether online or not. But even in these cases, there can be risks to the system, depending on how the funds have been sourced. For
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