tag:blogger.com,1999:blog-2761684730989137546.post15693166444750362..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: Marshall Auerback — Andy Haldane: The Counter-Reformation in Banking Has Just Begunmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2761684730989137546.post-54913909456227354892013-06-01T03:36:13.694-04:002013-06-01T03:36:13.694-04:00We don't need banks!
Endogenous money can be ...We don't need banks!<br /><br />Endogenous money can be created as EQUITY; it need not be created as DEBT.<br /><br />Some don't like to "share." Fine. Then let them borrow at free market interest rates from banks without a shred of government privilege - assuming banks could exist thusly to any large extent. Anonymoushttps://www.blogger.com/profile/13859046687902645077noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-47163657883738685172013-06-01T03:04:00.989-04:002013-06-01T03:04:00.989-04:00There's a very simple way to stop any bank fai...There's a very simple way to stop any bank failing (TBTF banks and small banks). It’s to outlaw the basic and fraudulent promise made by banks to depositors. That’s: “you deposit $X with us, which we promise to repay, meanwhile we lend on or invest that money in ways that are not 100% safe and which mean the value of those loans and investments can fall below $X – in which case we’re bust”.<br /><br />Depositors who want their money loaned on (i.e. who want their bank to invest their money on their behalf and earn interest) should carry the loss if it goes wrong. If I invest $Y in bonds in a corporation and it fails, I lose out. But if I plonk $Y in a bank which lends to corporations and it fails, the taxpayer comes riding to the rescue. Where’s the logic in that?<br /><br />In contrast, if a depositor wants 100% safety, then their money should be lodged in a 100% safe manner: e.g. just lodged at the central bank. In that case it won't earn interest.<br /><br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.com