Caveat emptor

In my previous post, where I introduced the raison d’être of this blog, I already mentioned briefly the issue of moral misconduct in the financial sector. Now since this is one of my “favourite” topics, I’d like to dedicate my first real post to one particular aspect of it: the principle of caveat emptor.

Taken literally, it means ‘buyer beware’. It is a common and widely accepted legal principle, practiced throughout the financial sector to indicate that clients and consumers are ultimately responsible for what they buy. So if either a senior trader at Citigroup or a certain John Layman from Uppsala municipality would decide to acquire a set of stocks or a mortgage, both should know whether it’s a good deal.

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