I put forward a pretty general theory that financial markets are intrinsically unstable. That we really have a false picture when we think about markets tending towards equilibrium.

A lot of the evil in the world is actually not intentional. A lot of people in the financial system did a lot of damage without intending to.

To my mind, there is a solution which has to do with democracy, because democratic governments are subject to the will of the people. So, if the people will it, you can actually create international institutions through the democratic states.

No individual anonymous participant can influence the prices and therefore you really can speculate in the market without paying attention to morality. That's one of the positive features of markets. That's why they function.

I think it is natural that every country has to take care of its interests, but there are some interests that are common to all countries. There are some human interests, or we need also international cooperation. We've sometimes confused it with dictation.

However, you have to recognize that regulations will never be completely successful and they will always be full of holes. You must constantly be ready to fill new holes. Actually regulation should be kept to a minimum, but there has to be some cooperation between market participants and authorities - as was the case in the early postwar years. The Bank of England was a very successful regulator by cooperating with market participants. This cooperative spirit was broken by the market fundamentalists.

Taking this view, it is possible to see financial markets as a laboratory for testing hypotheses, albeit not strictly scientific ones. The truth is, successful investing is a kind of alchemy.