Finance is all about trust. JP Morgan, patriarch of the banking dynasty, told Congress in the 1912 hearings that led to the foundation of the US Federal Reserve, that the first thing in credit was “character, before money or anything else. Money cannot buy it.
“A man I do not trust could not get money from me on all the bonds in Christendom,” he added. “I think that is the fundamental basis of business.” He was right. More than a century later, it is ever clearer that, without trust, finance collapses. That is no less true now, when quadrillions change hands in electronic transactions across the globe, than it was when men such as Morgan dominated markets trading face to face.
And that is a problem. Trust has broken down throughout society. From angry lynch mobs on social media to the fracturing of the western world’s political establishment, this is an accepted fact of life, and it is not merely true of politics. Over the past three decades, trust in markets has evaporated.
