In today’s world, the finance industry is called the backbone of economic development. But is this industry gradually weakening our economy? We can get the answer to this question from that YouTube video, which has been explained how finance has now become a dangerous network, not a helpful system.
What was the real purpose of the financial system
Initially the objective of finance was:
- Provide money to people and business
- Protect against
- And intensifies economic growth
But now the emphasis of this system is only on earning profits – that too without making anything or generating new employment.
How is the finance industry harming the economy
1. Rad to make money only with money
Today’s financial companies are engaged in trading and complex derivatives in the stock market. They benefit from this, but common people and small traders do not get any direct benefit.
2. Volatility and Economic Bubbles
When banks and investors focus only on profits, they start taking risky decisions. This makes bubbles in the stock market, which burst one day – like the global recession of 2008.
3. Inner sports and information misuse of information
Big players have access to data that common investors do not know. This leads to insider trading and causing loss to common people.
Know the opinion of experts
Experienced investors like Warren Buffett say that today’s finance market has become a “gambling”. People are investing money without understanding and suffer big losses.
At the same time, Rana Fourohar, who is a well-known journalist of Financial Times, says that the finance industry is now cut off from real economy. Companies are just engaged in increasing share price, not in innovation or employment.
What is the solution
- Strict monitoring and law: Control on tools like high-frequency trading and derivatives is necessary.
- Long -term thinking: Companies should focus on long -term development rather than quarterly profits.
- Transparency: Financial institutions have to be made transparent, so that the common investor also gets equal chance.
The aim of finance was to pursue the society and the economy, but today it is becoming a problem itself. If control and improvement is not done in time, then its direct effect on our daily life and economic stability
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