Something for Nothing: Arbitrage and Ethics on Wall Street - Hardcover

Maureen O'Hara

Hardcover

ISBN 10: 0393285510 ISBN 13: 9780393285512

Publisher: WW Norton & Co, 2016

Synopsis

In 2001, Goldman Sachs structured a financial contract so that its client, the Greek government, would appear to have less debt than it actually did. When the Eurozone crisis erupted years later, the inevitable question arose: even if Goldman's actions were technically legal, were they ethically wrong? In Something for Nothing, Maureen O'Hara examines the murky moral universe of modern finance and its foundational technique: arbitrage. Deployed correctly, arbitrage creates value and generates benefits for all, but it can also exploit and confound well-meaning financial safeguards. Examining key cases including the Lehman Brothers' collapse and energy market manipulation in California, O'Hara reveals the ways arbitrage-disconnected from any value system-can transgress ethical lines. In its critical assessment of the mechanics of markets today and its call for more transparent and sound financial practices, Something for Nothing powerfully engages with the moral decision making inherent in our financial system.

About this title

Review:

Sophisticated.

A leading financial economist attempts to counterbalance 'the impression that modern finance is at best 'ethically challenged' or at worst 'fatally flawed, ' a perception bolstered by the 'constant barrage of financial scandals.' . . . . O'Hara . . . whose qualifications and contributions are recognized in the world of finance as well as academia, is concerned with exploring the gray areas between an ethical approach to financial transactions and behavior sanctioned by law. Identifying where such lines are drawn opens the door to a provocative and stimulating discussion of the kinds of ambiguous situations that arise almost daily in the financial sector, as well as the economy at large.

Something for Nothing joins and extends a worthy tradition dating back at least to Adam Smith--who was both an eminent philosopher and an eminent economist--in wrestling with how markets do or don't succeed in channeling some of our baser traits, greed and deception, in socially useful directions. Events surrounding the financial crisis and the ongoing project or crisis to construct a stable Euro zone have brought these always-present issues to the fore. Maureen O'Hara's distinction as an economist who knows what makes sophisticated 'high frequency' markets work lends especial credibility to her analysis. Getting these things right is important if the general public is to support wise regulation of these markets.--Thomas J. Sargent, winner of the Nobel Prize in Economics and William R. Berkley Professor of Economics and Business at New York University

Something for Nothing teaches finance from a moral perspective, integrating morals into the theory. This should be essential reading for people seeking an introduction to finance, who feel they can't really understand it properly if they can't square it with their deep values.--Robert J. Shiller, winner of the Nobel Prize in Economics and Sterling Professor of Economics at Yale University

About the Author:

Maureen O'Hara is the Robert Purcell Professor of Finance at the Johnson Graduate School of Management, Cornell University. She is recognized as one of the leading researchers in academic finance, with particular expertise in market microstructure, banking, and law and finance.

About this edition

• Publisher: WW Norton & Co
• Publication date: 2016
• ISBN 10: 0393285510
• ISBN 13: 9780393285512
• Binding: Hardcover
• Number of pages: 224