The Long Finance initiative was established in 2007 by Professor Michael Mainelli, Z/Yen Group and Gresham College. It was created to research ways in which to implement long-term thinking across a global network of people. We aim to develop an organisation capable of deploying new financial approaches in pilot projects and research prototypes, that operates openly and transparently and works to scientific standards and ideals. At the same time, we are looking to create a supportive and caring community where people can truly question the accepted paradigms of risk and reward.
“When would we know our financial system is working?” is the question underlying Long Finance’s goal to improve society’s understanding and use of finance over the long term. In contrast to the short-termism that defines today’s economic views the Long Finance time-frame is roughly 100 years. Long Finance aims to:
One of the key outputs of Long Finance is research reports, published under the following series titles:
Finance Shorts: concentrating on contemporary issues seen through a long-term lens;
Eternal Brevities: initiating discussion on new ideas that encourage a long-term view of commerce;
Financial Centre Futures: including the GFCI Index.
L3F is a group of professionals working under the Long Finance umbrella to formulate scenarios for the future of finance services. These can then be used to draw out the near term implications of possible future events for the various parts of the financial services sector such as insurance, investment banking, retail banking, institutional fund management, etc. The intention is that these scenarios be exposed to wider comment and then used as the basis for financial services organisations to make better decisions in the near to medium term, based on better views of the future.
Long Finance comprises a network of individuals and organisations who are actively involved in financial services, as well as members of the wider community, all of whom are working towards the development of a more sustainable financial system. Long Finance engages people through lectures, seminars and discussions, including two annual conferences. Speakers have included Brian Eno, Neal Stephenson, Professor Paul Ekins, Bernard Lietaer and Stewart Brand.
The world is full of surprises, and adapting to them is more important than ever. Mankind’s ability to perceive risks improves faster than its ability to respond to them. Following the credit crunch of 2007, it is difficult to remember a time when so many elements of the financial services industry appear to have failed, and when the financial services industry is so reviled. In many ways, the failures of the financial services industry are highlighted by the hubris of risk management until as recently as the spring of 2007. Leading approaches to managing credit and market risk were seen to be inadequate, the financial system failed to spread risks as intended and it became clear that an enormous risk category, liquidity, was not really understood at all. Leading financiers, regulators, central bankers and legislators seem to lack the intellectual capital and energy to create new learning that might help to make future financial markets more secure.
Financial thinking needs to broaden and deepen rapidly. Broaden, to look more widely at the social, ethical and economic relationships of financial services in its widest sense. Deepen, to develop new frameworks and models that will help people develop more robust financial approaches. Simultaneously, this is an excellent time to question some of the fundamentals, such as is our market/credit/operational taxonomy flawed or does regulation increase risk?