Making Money The Financial System is Rigged Against Normal People
36 snips
Jan 26, 2026 Tarun Ramadorai, a financial economics professor and adviser to central banks, outlines how product design and weak rules let firms profit from everyday mistakes. He digs into teaser mortgages, insurance price-walking, and why the middle class gets squeezed. He champions plain-vanilla starter products, stronger guardrails, and learning from Denmark, India and Brazil.
AI Snips
Chapters
Books
Transcript
Episode notes
Products Exploit Human Weaknesses
- Financial products are designed to exploit human biases because firms respond to actual demand, not ideal consumer choices.
- Tarun Ramadorai argues incentives reward selling confusing or harmful products rather than helping consumers.
Personal Roots In Household Finance
- Tarun recalls his parents' struggle getting a home loan in India, which sparked his interest in household finance.
- He noticed variation where savvy people benefited while others repeatedly lost out.
Peg Mortgages To A Clear Benchmark
- Replace teaser mortgages with adjustable rates pegged to the Bank of England plus a fixed spread to avoid expensive roll-ons.
- This reduces costly frequent refinancing and lowers long-run costs for borrowers.
