Professor Niamh Hardiman:

My argument is that there is a different sort of balance to be struck. At the time I am speaking about, some banks were growing profits at a rate that most expert commentators would have thought to be unwise. There would have been a question about the riskiness of the business model they had been pursuing. If there was nothing illegal about what they were doing and if they were not constrained by regulation from what they were doing, there was nothing in essence to stop them other than what their own internal audit or risk management might have suggested.

My observation is about the pressure this puts on other financial institutions that are also responsive to their own shareholders. When an economy is in this exuberant state, people expect their investments to yield a good return. My comment is that people should be sceptical about the durability of the business model that their money is tied up in. The economist, Hyman Minsky, is often cited nowadays because a long time ago he developed a model whereby he predicted that crashes were inevitable, that financial crises will recur and will happen for different reasons next time, but they will happen. They can be worse or less damaging, but they will be driven by the acceleration of expectations that there is money to be made. People pile in to try to make money while they can and the people who are slowest in getting out are the ones who will be caught most severely. The Minsky moment comes when panic sets in and exuberance evaporates and there is no more money to be made. People start to exit that apparently profit-making sector very rapidly, causing a sudden crash.

It is a monetary note to shareholders too, to be sceptical, to ask questions and to be challenging.