The next crisis? We’re hardwiring short-termism into the financial system

By Ben Wright – No one is saying the investment industry is entirely to blame for these problems.

They are rooted in human behavior and have in recent years been exacerbated by a raft of misguided regulation. Most investors are risk-averse, short-termist and congenitally unable to spot a bandwagon without suffering the urge to climb aboard.

This combination is not particularly conducive to making sensible investment decisions. Unfortunately, over the past decade a number of accountancy rules and regulations have been introduced that accentuate these human foibles rather than trying to correct for them. more>



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