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One piece of technology is changing providing access to banking to millions of people in communities around the globe that have never had access before: the mobile phone. This Brookings video highlights M-Pesa , a mobile banking product that has changed the lived of an estimated 2 million Kenyans, and arguably lifted the economic fortunes of their communities. It is the story of an innovative product that scale s rapidly:

With new regulations scheduled to hit, Europe's banks can expect lower returns, according to a new report from McKinsey & Company . Down the road, banks have an opportunity to make up the lost ground and build more sustainable practices, but first the hit on returns will look something like this: We estimate that without any mitigating action by banks or material changes in the economic and competitive environment, recent global rules, especially Basel III,1 and new regional and national regulations will help reduce retail banking’s average return on equity (ROE) in Europe’s four largest markets to 6 percent, from about 10—a 41 percent decline. The analysis, based on 2010 financial-year data, assumes that the cumulative regulatory impact expected over the next several years will be realized immediately. The effects vary across the four markets, but in all cases the outlook is grim (exhibit). In France, ROE will fall to 9.5 percent, from 13.5—a 29 percent decline driven by changes affecting mortgages, debit cards, and investments. In Germany, ROE will fall to 3.5 percent, from 6.6 (a drop of 47 percent); almost all retail products will be affected and many will become unprofitable. ROE in Italy’s retail banks starts from a lower base, 5.1 percent, but will fall further, to 3.1 percent. In the United Kingdom, returns will fall to 7 percent, from 13.6 percent. The impact here, 48 percent, is high because of extensive country-specific regulation. Access the full report here .

Tis the season of graduations, and Robert Shiller has some thoughts to share with newly minted graduates looking to work in the field of finance. One key theme: Shiller wants new entrants into the fields of banking, economics, and finance to consider themselves as fiscal stewards and not simply people out to make money for money's sake. From Project Syndicate : Those of you deciding to pursue careers as economists and finance scholars need to develop a better understanding of asset bubbles – and better ways to communicate this understanding to the finance profession and to the public. As much as Wall Street had a hand in the current crisis, it began as a broadly held belief that housing prices could not fall – a belief that fueled a full-blown social contagion. Learning how to spot such bubbles and deal with them before they infect entire economies will be a major challenge for the next generation of finance scholars. Equipped with sophisticated financial ideas ranging from the capital asset pricing model to intricate options-pricing formulas, you are certainly and justifiably interested in building materially rewarding careers. There is no shame in this, and your financial success will reflect to a large degree your effectiveness in producing strong results for the firms that employ you. But, however imperceptibly, the rewards for success on Wall Street, and in finance more generally, are changing, just as the definition of finance must change if is to reclaim its stature in society and the trust of citizens and leaders. Finance, at its best, does not merely manage risk, but also acts as the steward of society’s assets and an advocate of its deepest goals. Beyond compensation, the next generation of finance professionals will be paid its truest rewards in the satisfaction that comes with the gains made in democratizing finance – extending its benefits into corners of society where they are most needed. This is a new challenge for a new generation, and will require all of the imagination and skill that you can bring to bear. Read the full speech here .

Esther Dyson is a big believer in startups and the power of entrepreneurship. So it may come as a bit of a surprise to learn that she is not on board with the JOBS Act . JOBS stands for Jumpstart Our Business Startups. Dyson doesn't seem to buy into the idea that government can do the jumpstart part effectively, and she likens such a move to policymakers thinking they could, or even should, help people fulfill the "American dream" of home ownership. Writing at Project Syndicate , Dyson commends the trusting spirit behind the JOBS Act, but explains that such a well-meaning initiative is rife for exploitation: I wish I had more faith in the system, but the problem is not a lack of good people, good investors, or good entrepreneurs. The problem is that, without regulation, bad people take advantage of the good ones. While regulation and restrictions may hamper small business, not all regulation and restrictions are useless. Yes, there are some wonderful, honest companies that deserve investment and can’t get it, but they are not that common. I see a lot of start-ups. Many are appealing and have good ideas, yet most of them fail. Now the quality of even the honest start-ups is likely to decline as more of them are established, and they will spend more of other people’s money before failing. For example, with more start-ups, it will be even harder for each of them to find management talent and the right employees. Indeed, many people whom an entrepreneur might have hired will probably become CEOs of competing start-ups. Meanwhile, all of them will be competing for a finite number of customers, and those companies that make progress will then have to compete for scarcer scale-up capital. Many investors in these startups are likely to lose their money. Even under the current system, many angel investors lose money. The best route to success in angel investing is to invest in, say, ten or more separate companies, so that you have the chance of at least one big winner. But, again, a broader investor pool is likely to reduce the average number of investments per investor, with inadequate diversification leading to many more losers than winners. The faith that drives the JOBS Act is the same magical thinking that drives many Internet phenomena: people are good and everyone means well. But the Internet’s easy accessibility and low entry barriers have led to spam and malware and bad behavior; each new service starts out “clean,” but then ends up requiring its own regulations. Read Markets of Magical Thinking here .

With the Senate taking up a House-passed bill to limit insider trading by members of Congress, Paddy Hirsch takes to the Marketplace Whiteboard to give his own, clear explanation of what the practice involves. But instead of using members of Congress in his example, he uses chickens and foxes:

In his latest book, The Price of Civilization: Reawakening American Virtue and Prosperity , Jeffrey Sachs calls on Americans to recognize that we are connected to other countries' problems in direct ways, and that our behavior as consumers and citizens have a significant impact on global development. And he offers up his prescription for working toward a cure to the global economic crisis. He discussed the state of the global economy, and specifically the euro-zone debt crisis, in an interview with Parminder Bahra of the Wall Street Journal:

As much as the US economy is struggling, exports have been strong ever since the recession ended. According to Jay C. Shambaugh , of the McDonough School of Business at Georgetown, exports have risen 23% since the end of the recession. This is easily explained by the weakness of the dollar, right? The costs for US goods abroad have decreased along with the strength of the US economy. Not so fast, says Shambaugh. Writing at Econbrowser , he points out that the patterns of where exports have risen do not match the dollar's relative decline: The takeaway for Shambaugh seems to be that, while exports can not serve as the fix for the US economy's problems, their relative strength is a sign that the foundation might not be as cracked as some suggest: The ability of U.S. firms to increase production and sell to markets where demand is growing is just more evidence that the U.S. economy is not fundamentally flawed or broken. Firms can find workers and increase output where they have customers. Yet while exports to growing foreign markets have been soaring, at home, residential construction has collapsed, structures investment by firms has collapsed, and state and local government spending has declined. All of these are a serious brake on demand. Compounding all this is the fact that real Federal Government consumption expenditures and gross investment in the third quarter was 2% below that of a year ago. This acts as a further brake on growth in output and employment. Some businesses may complain about fear of regulation (though in surveys their number one complaint is lack of customers) and some commentators may worry about structural unemployment and a lack of appropriate skills amongst the U.S. work force. There is plenty of reason to always make sure that supply side policies are sensible and worker training and education is adequate. But these do not seem to be the problems of today. Based on exports, the evidence shows that where there is demand for their products, American firms are more than ready to produce and to sell. Read What can exports tell us about the economy? here .

Alistair Darling was the Chancellor of the Exchequer when the Global Economic Crisis hit, and he was tasked with rescuing Britain's banking system. Now he argues that further banking reforms are necessary to prevent another crisis. He spoke about that need, and the state of the global economy today, when he sat down for Tea with the Economist :