In my view, the current focus of financial reform is off-target. This crisis is not a simple bubble crash, however major, nor is it just a financial problem.'

'What I see as the problem both in the UK and in other advanced countries is that the financial sector has gotten used to profit rates that are way above those experienced by the production economy. Worse still, the financiers really think that it is their genius that got them all this excess wealth, rather than the special bubble conditions that made it easy.

'During "golden ages", finance supports both production and consumption across the board, and shares in the profits of a flourishing and rejuvenated real economy. The whole problem of adequate regulation has to do, then, not with restraining finance but with steering it away from the toxic behaviours of recent times and opening sufficiently profitable avenues in the direction of the real economy.'

This speech was delivered by Carlota Perez, visiting scholar at the University of Cambridge and a member of IPPR's New Era Economics panel, at a seminar event 'Reforming finance for a new era economy', hosted by IPPR on 27 October 2011.