tag:blogger.com,1999:blog-2761684730989137546.post2879007142208314378..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: TASS — Central Bank: Russian banking system capable to finance economic growthmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2761684730989137546.post-76506842953567584782016-06-01T08:31:05.328-04:002016-06-01T08:31:05.328-04:00"We managed to preserve population and compan...<i>"We managed to preserve population and companies’ confidence in the banking system. ...</i><br /><br />Banks borrow short to lend long - ie. they gamble. Except with government-provided deposit insurance and a fiat lender of last resort it's hardly a gamble anymore; it's a scam for the benefit of the banks themselves and the most so-called creditworthy, the rich.<br /><br />Now suppose for the sake of argument that banks were truly private* with entirely voluntarily** depositors. Then, by definition, all remaining deposits with them would be at risk, not necessarily liquid investments/bets.<br /><br />Then we should no more care if the banks failed than if Las Vegas failed.<br /><br />Then why do we, the Russians, and every other country (that I know of) let the banks hold the real economy hostage?<br /><br />*eg. no fiat lender of last resort.<br />** eg. all citizens may have inherently risk-free accounts at the central and government-provided deposit insurance abolished.Andrew Andersonhttps://www.blogger.com/profile/14296407661618321637noreply@blogger.com