The sources of the current economic crisis are complex and the blame for the crisis difficult to assess precisely. But it’s clear that for years leading investment firms have disregarded the common good and even their own long-term interest in their quest for profits.
A market for capital is a good and necessary feature of a market economy. Economic growth depends on the ability of firms to borrow money to generate the goods and services that create earnings. When people save money in bank accounts or retirement accounts, their savings can be put to work as capital that serves the productivity of the entire society. A market for financial capital is created wherever savers and investors meet to exchange contracts or IOUs that reward the savers for lending their money. When this saving and investment flow is successful, the economy grows. When loans become difficult to get, economic growth is constricted.