Options for Banking Reform

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jakeThis Maxim that “Investors can always borrow if they are credit-worthy” confuses me, wasn't the credit crunch a demonstration that viable businesses were unable to access affordable credit from the banks due to the banks having too many toxic assets and the cost of credit going up?But the actual...

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RJBanks can only loan money if there is a willing borrower. And if Govts had increased interest rates then there would have been a lot less than there was before the crash. Or even required house buyers to have a bigger deposit. Govt could ahve stopped the overheating housing market but they did nothi...

last month

RJNotes and coins are not free of debt. Money (bank credit) is created when a bank loan money. Say £1000 to bob The banks JE isDEBIT Loan account (banks asset/Bobs debt) £1000CREDIT Bobs Bank account (Banks liability/ Bobs money) £1000Bob then exchanges £100 for 10 * £10 Notes. The bank JE isCRED...

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solutreanRJ. Should not your first paragraph regarding what the banks do read. “They create new money when people 'BORROW' money?” The loan is an asset of the bank and a liability of the 'borrower'. The money that is created is a liability of the bank and an asset of the 'borrower'....

4 weeks ago

RJInteresting book. But what put me off reading it was this"Fiscal policy does not in itself result in an expansion of the money supply. Indeed, the government has in practice no direct involvement in the money creation and allocation process. This is little known, but has an important impact on the e...

last month

RJThanks for posting this. Interesting is the point about notes being a liability of the central bank (page 2). Notes then are not debt free. Notes have value only because they are backed by the Govt. And can be used to pay tax.Re ignorance. I gave examples of this. I did not include anything about US...

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Definancialisation: A democratic reformation of finance (IPPR report)

IPPR

IPPR, the Institute for Public Policy Research, one of the UK’s leading thinktanks, published new report this week. In this report they argue for structural reform to address the deeper institutional arrangements that underpin financialisation and call for establishment of an in-depth parliamentary commission to investigate the role of money and credit within the economy.

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