In theory, the financial sector is supposed to support the long-term growth of the real economy. In practice, it has become so detached from the real world that it is more akin to a fantasy land, inhabited by a growing number of peculiar characters undertaking nonsensical tasks.

Source: Stewart Investors Sustainable Funds Group, Alice in Financeland, (Feb 2017).

Please respond to the following questions by drawing upon relevant concepts/theories you have learnt in this unit.

1. Discuss why capital markets have become so disconnected from the real economy.

2. Discuss what are some of the barriers to change (and why is it so hard to change).

3. What do capital markets need to do differently in the future to better support economic, social and environmental outcomes for people and the planet.