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I finally watched the second Wall Street movie, having avoided it for some time because reviews called it trite, uninteresting, predictable and boring. Predictable and, consequently, somewhat boring: yes. But trite and uninteresting? No. Indeed, there were some gems of lines that deserve re-statement and reflection.

Consider the memorable line in the first Wall Street movie: “Greed is good.” Once upon a time in the business world, this assertion was a truth. Greed made the world go ‘round; it was the lubricant that spurred action and, because everyone knew the game, there was a certain honesty to the system. But, today this truth has become a question: can capitalism survive if we cannot prove the value of greed?

Fast forward to the banking-generated “recession” of 2009 and the near collapse of the world’s financial structure. Released from jail, but not repentent, Gordon Ghekko asks, “Is Greed good?” Money, he says, is “a bitch that never sleeps” and, in addition, an intensely jealous mistress. The metaphor GG and the screenwriter pick up on is the language eighteenth century observers of financial matters used to describe and understand the volatility of capitalism. Fortune was a fickle woman: you had to woo and seduce her to win her favour. But her favour was capricious — she could not be trusted. Even with over 200 years of observation, study and analysis, we are reduced in 2011 to reviving this metaphor as the best way to understand a financial system whose volatility continues to elude – and terrorize – us.

What we need to do, as Mr. Ghekko asserts, is to restore confidence by embracing two assertions.

The first is that no individual is responsible.

The second is to identify the moral hazard and impose regulation to contain it. But when moral hazard refers to the problem of “asymmetric information” – read, when one person takes advantage of knowing something the other party does not know – we are deluded to think that regulation will contain the problem. The truth is that the financial system is built upon, and functions because of, the existence of moral hazard. Regulation will not change this; and if regulation were to change this, we will need to create an alternative system. We live in the delusion that there is a virtuous centre to the current financial system.

This can then explain how it was that Citigroup held a $40 billion position on sub-prime mortgages, but the CEO at the time, Chuck Prince, claims he was not responsible for the disastrous outcomes because he did not know about this position. As reported by The Financial Crisis Inquiry Report, the “defence” was that that was a small position on a corporate balance sheet of $2 trillion. So small and yet so large.

Abby Joseph Cohen, one of the most renowned market analysts and a partner at Goldman Sachs, explained the crisis in New York Times magazine:“There was a very unfortunate confluence, bad decisions made by many different entities.”

But should this absolve individuals from responsibility for creating a horrendous financial crisis that had deep impacts on people around the world?

Moral hazard means that individuals are shielded from accountability and responsibility. Because of something called “information asymmetry” – where one member of a transaction knows something the other does not – victims have had to bear the consequences of financial risk-taking. There is a reason that the buyer can’t beware: they are ill or uninformed and it should be the responsibility of the seller to rectify this.

If we believe in free will-and I assume we do-then we need to take responsibility for the decisions we make individually as well as collectively. When the analyst assesses the value of a stock, the investor pitches the value of a project or the banker sells a new financial product, we all need to know we are responsible for those decisions. Otherwise we will be operating in a world bereft of real human connection and accountability.

The absence of human trust is the real problem revealed by the actions of the “market”. The absence of trust only makes it harder for the market to operate efficiently. More potently, it dismantles the glue that binds people into families and communities. We give permission for a world where no one has anyone else’s back.

But recognition of moral hazard and the call for new regulation are the responses we seem to need and want,and all that we have been given. The alternatives are to call the financial system fundamentally flawed or insist that those who created it need new rules of engagement. And what would this option lead to? Most of the time, we are too terrified to even contemplate the question.

So we soldier on, without abandoning the financial institutions we have come to know. We continue as before, out of habit and fear; it is no longer out of belief or trust.

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Junxion’s Pamela Divinsky is a featured writer on Corporate Knights, a Canadian magazine and website committed to “clean capitalism”.