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Risk-Seekers Or Rent-Seekers? Wholesale Banking Extracts Value

Journal of Risk Finance, Volume 8, Number 1, Emerald Group Publishing Limited (January 2007), pages 79-83

6 Pages Posted: 12 Jan 2021

See all articles by Michael Mainelli

Michael Mainelli

Gresham College; Z/Yen Group

Date Written: August 01, 2006

Abstract

Are investment bankers valued members of society, or leeches? It all depends on the value they add. In economics, rent seekers are those who compete throughmanipulating the environment rather than adding value. Rent seekers use methods such as encouraging regulation or government protection to extract wealth (rent) without improving productivity. If it sounds like a term of derision, it is, and is frequently associated with other terms such as lobbying, bribing and corruption.Wholesale banking may be at a cross-roads. Down one road lies a free-wheeling,value-adding industry; down the other a shrinking oligopoly of banks share their takings from exploiting customers.

Keywords: Risk-Seekers, Rent-Seekers, Value, Wholesale Banking

JEL Classification: G00, G30

Suggested Citation

Mainelli, Michael and Mainelli, Michael, Risk-Seekers Or Rent-Seekers? Wholesale Banking Extracts Value (August 01, 2006). Journal of Risk Finance, Volume 8, Number 1, Emerald Group Publishing Limited (January 2007), pages 79-83, Available at SSRN: https://ssrn.com/abstract=3719275

Michael Mainelli (Contact Author)

Z/Yen Group ( email )

41 Lothbury
London
United Kingdom

Gresham College ( email )

Barnard's Inn Hall
Holborn
London, EC1N 2HH
United Kingdom

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