The real problem isn't banks, it's investors

When Mark Zuckerberg announced on the Oprah Winfrey TV show that he was giving a $100m (£62m) grant to disadvantaged schools in Newark, New Jersey, he was accused of turning to charity to improve his image. His image, especially in the light of the Social Network film about his life, was the focus of attention.

There was little discussion of his meagre cash pile and how the donation would be in Facebook shares. Because while the 26-year-old internet tycoon is estimated to be worth $6.9bn, he is a paper billionaire.

The phenomenon that is Facebook is expected to float in 2012. Until that time Newark schools will need to sell the company's shares on the fast-growing market in private shares.

Some estimates put the buying and selling of unlisted privately held shares in the US at the same level as trading in listed shares. In other words, the highly regulated and taxed public markets on the New York Stock Exchange and Nasdaq are being superceded by largely unregulated and lightly taxed private markets.

It is a trend that makes some regulators nervous.

Charles Bean, the Bank of England deputy governor, is aware the next crisis could be triggered by these little understood but highly influential markets. Like a Met Office weather watcher staring at the Gulf of Mexico, he is keen to spot the next hurricane and measure its speed, direction and the potential damage it might cause.

In a speech last week to the Royal Statistical Society, he said there were clues. Instead of a weatherman, he likened himself and his colleagues in the government's new super financial regulator to seismologists. Not for them the easy business of staring at satellite images and tracking storms. Instead, when they take over from the Financial Services Authority in 2012, their job will be more akin to listening for tremors in the financial system. Listening for friction and potential quakes as tectonic plates moved and created explosions. Ultimately they might offer a view on the possible location and severity of a quake. They might even hint at the timing. However, it would all be rather vague. If there was one thing certain, or at least probable, it is the next crisis will come from an area previously unknown to the bank, or one considered a low potential risk, he said.


More commentary here

Finland's accessible education in University World News

Finland has both the most affordable and accessible system of higher education, according to a study of 17 countries undertaken by Canadian research group Higher Education Strategy Associates (HESA). Norway is a close runner-up.

The country rankings were derived from a composite of six different measures of affordability and four measures of accessibility, in the study by Alex Usher and Jon Medow titled Global Higher Education Rankings 2010: Affordability and accessibility in comparative perspective.

The countries surveyed were Australia, Canada, Denmark, England and Wales, Estonia, Finland, France, Germany, Japan, Latvia, Mexico, Netherlands, New Zealand, Norway, Portugal, Sweden and the United States.

The most 'affordable' higher education was to be found exclusively in Europe: Finland was the most affordable, followed by Norway, Germany, Denmark and Sweden.
English-speaking countries fared less well: Canada, New Zealand, England and Wales, the United States and Australia were ranked 9th to 13th, respectively.

The nations with the most 'accessible' higher education were Finland, the Netherlands, Norway, the US and Australia.

HESA's Alex Usher described Finland's results as "very good" across the board. "They have reasonable education costs, a strong and generous system of both loans and grants, high participation rates and an egalitarian student intake. From a student perspective, there is a lot to like there," he said.

Finland and Norway performed well in both affordability and accessibility, but results for the countries demonstrate that 'affordability' and 'accessibility' are not always related concepts.

Usher said: "Germany fared very well in terms of measures of affordability, but very badly on measures of accessibility. The United States does very poorly on measures of affordability, but does reasonably well in terms of accessibility. That suggests there is considerably more to the issue of accessibility than simple costs."

Even if Finnish higher education is both 'affordable' and 'accessible', it is not exactly 'efficient'. Finland is one of the nations to espouse free and universal higher education, and compared with most countries its student welfare is extraordinarily generous.

However, as previously reported in University World News, its students are also among the world's slowest (and therefore oldest) by the time they complete their studies and enter the labour market.

Leaving the family home to enrol in higher education is a cultural 'rite of passage' in Finland, but the grants and subsidised loans and other services available to students have not kept pace with inflation, particularly rental costs in the capital Helsinki. The result is that students work to support themselves, rather than devoting themselves to their studies. Earning 'too much' leads to cuts in student welfare payments. And so the cycle goes on.

As it stands, there is little incentive for Finnish students to complete their studies in minimum time. Any incentive scheme to improve throughput could depend on the introduction of a fee-free threshold. This might necessitate a fully-indexed student welfare and loan package that actually allows students to cover their living costs (including Helsinki rents) without having to work excessive hours during their studies.

Here are the results: Finland (1st in affordability, 1st in accessibility), Norway (2nd and 3rd), Germany (3rd and 11th), Denmark (4th and not rated), Sweden (5th and 9th), Netherlands (6th and 2nd), France (7th and 10th), Latvia (8th and not ranked), Canada (9th and 7th), New Zealand (10th and 6th), UK-England and Wales (11th and 8th), the United States (12th and 4th), Australia (13th and 5th), Japan (14th and not ranked), Mexico (15th and 14th), Portugal (not ranked and 12th), Estonia (not ranked and 13th).

* Dr Ian R Dobson is an Australian scholar living in Finland. He is editor of the Australian Universities' Review.