TalkCarswell.com

Thought for the day

"Whenever loans were systematically made up from demand deposits, the historical constant in banking appears to be eventual failure".  Thus writes Jesus De Soto on page 69 of Money, Credit and Economic Cycles.

And he wrote that over a decade before our own financial crisis.

Posted on 5 March 2010 by Douglas Carswell

Comments

I'm your new biggest fan. What's wrong with banking:

http://www.cobdencentre.org/2009/12/banking-part-1/

Steve

Posted on 5 March 2010 08:07 by Steve Baker

...and without the risk of the bank failing, as they all now know the taxpayer will step in no matter what the do, risktaking will carry on as a major tactic in banking business behaviour.

The next Chancellor (Osborn we hope) could do worse than announce new FSA/BoE rules that say there will be no more bank bailouts. Savers and depositers will be protected but investors and shareholders will not. The best way to stop bad behaviour is to raise the stakes so failure actually means something - then the banks will constrain their own behaviour which will be much more effective than any external set of rules.

Posted on 5 March 2010 09:15 by JohnRS

"The next Chancellor (Osborn we hope) could do worse than announce new FSA/BoE rules that say there will be no more bank bailouts. Savers and depositers will be protected"

Bailing out a bank's customers is still a bank bailout. Bank customers would be much more aware of their bank's situation and more willing to withdraw if there was a reasonable chance of a bank run.

Posted on 5 March 2010 09:46 by Shed Plant

Banks should not be allowed to lend out any more than they actually have in deposits. No more conjuring money out of a hat on the basis of the person taking out the loan's promise to pay.

Simples.

Posted on 5 March 2010 11:52 by Jack

Is it a cliche to quote Santayana about remembering history?

Posted on 5 March 2010 11:55 by Russ Williams

My thoughts-

B.A.N.K. means

"Borrow And Now Kneel".

&

D.E.B.T. means-

"Dependant Entirely on Bankers Trust"!!!

Posted on 6 March 2010 08:19 by Eric of Walton

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