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Rules are there to be broken....if it saves your skin
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Meaningless.
The banks hold a lot of YOUR and OUR and Businesses' money on our behalf. (most people and businesses don't keep their spare cash under the bed).
If banks fail then YOUR money is no longer available to you to pay your bills; similarly businesses will fail as THEIR money is not longer available to them to pay their supplier or their employees... a bit little Cyprus 'haircut' only lot worse.
So letting banks 'fail' in general would mean massive unemployment in the country and people lossing their homes etc.
So on balance, although it does preverse the principle of moral hazard, it would ruin lots of decent people and lots of valuable businesses.
Obviously in practice the government would have to bail out the situation as indeed it has done by keeping the banks afloat.
The banks have all the money, and therefore call all the shots.
Under the 'rules' of capitalism, their job is to provide the necessary finance to keep the system growing.
But they aren't doing it - they are using OUR money and Businesses' money to generate massive profits for themselves.
Change will never be easy, but that doesn't mean it isn't necessary.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
The banks have all the money, and therefore call all the shots.
Under the 'rules' of capitalism, their job is to provide the necessary finance to keep the system growing.
But they aren't doing it - they are using OUR money and Businesses' money to generate massive profits for themselves.
Change will never be easy, but that doesn't mean it isn't necessary.
TruckerT
I'm unaware of the rules of capitalism : are they written in a holy book somewhere?
I'm certainly unaware of a 'rule' that says the system must keep growing.
Even a little reading of economic history or a good memory will show the we have economic cycles with peaks (sometimes called booms) and troughs (sometime called busts).
During the downturns (like the last few years) the economy declines.
I curious how you consider the banks are making massive profits by not lending.
You can of course with hold your money from the banks by keeping it at home.0 -
I curious how you consider the banks are making massive profits by not lending.
Me too - they must be even cleverer than you and me.
You can of course with hold your money from the banks by keeping it at home.
There is a big difference between everyday transactions, and casino economics. Unfortunately, the banks are in total control of both, and, as you say, the money which they gamble with is the money which you and I need for our day-to-day transactions.
TruckerT...According to Clapton, I am a totally ignorant idiot.0 -
do tell us about the casino banking that our banks are practicing
The evidence only comes to light when they lose. The most recent high-profile example was Cyprus. But even then, the day-to-day transactions of ordinary people were protected by taxpayer-funded guarantees for smaller depositors.
TruckerTAccording to Clapton, I am a totally ignorant idiot.0 -
Holding European government debt wasn't always considered casino banking."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0
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The evidence only comes to light when they lose. The most recent high-profile example was Cyprus. But even then, the day-to-day transactions of ordinary people were protected by taxpayer-funded guarantees for smaller depositors.
TruckerT
what has Cyprus got to do with casino banking?0 -
Graham_Devon wrote: »The IMF could surely have forseen such an outcome as a possibility though?
Surely they could have calculated for such a possibility before it happened and written their rules to allow this?
Afterall, many "loons" could foresee such issues. Maybe not the exact details, but they saw issues ahead, so if the loons could see it, why couldn't the highly intellectual architects?
The IMF is just a collection of people who mostly don't really know what they're doing and make it up as they go along. They have this in common with pretty much all large organisations in the entire world, which are pretty much all staffed in the same way.0
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