An end to the current financial capitalism model

The pigs at the trough greedfest that has been prevalent these past several years in the financial markets may be coming to an end. The Financial Times says the current financial model where governments let business self-regulate is no longer workable or valid.

Three reasons:

Governments themselves are becoming more active in business, sometimes using financial holdings and information as political weapons.

Regulators are becoming more pro-active in stopping creeping takeovers of companies and of LBO plans that heavily favor a few, rather than the company as an entity.

The current turmoil in the markets that started with subprime shows that self-regulation does not work.

The new risks produced by financial innovation were left to a sector that alone was considered able to understand its instruments. The crisis demonstrates the costs to the real economy and lack of an efficient self-regulating system.