Tag: banking

Posted on by Tim Worstall

So Why Did We Bother To Rescue The Banking System?

That we made a profit on rescuing the banking system is something oft forgotten – or lied about. But it is indeed worth asking, well, why did we bother? The answer being that the existence of a functioning banking system is something that makes us richer:

Trade and innovation: The Schumpeterian role of banks
Christian Keuschnigg, Michael Kogler 04 March 2019

Only strong banks can fulfil their Schumpeterian role by efficiently reallocating credit. The column argues that high capital standards, efficient bankruptcy laws, and a lower cost of bank equity improve credit reallocation and thereby support the productive specialisation of the economy.…

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Posted on by Tim Worstall

Laurence Kotlikoff On What Really Produced The Recession And Crash – No, Not Bad Bankers

It’s not necessary to entirely agree with this analysis to grasp and agree with the underlying point being made. It was the structure of the banking system, not the existence of bad actors within it, which led to the crash and thus recession. I’d definitely not agree with the solution either:

The Big Con: Reassessing the ‘Great’ Recession and its ‘fix’
Laurence Kotlikoff 28 November 2018

The general consensus on what caused the Great Recession can be summed up as “bad banks full of bad bankers did bad things”.…

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Posted on by Tim Worstall

Two Absurd Claims About Lending And The Great Crash

The Observer’s business editorial really outdoes itself today with two fallacious claims about bank lending and recessions, crashes and even the Great Crash. It manages to make the opposite statement to the one they normally complain about and then also get the cause of and reason for that Crash wrong.

They wanted companies to borrow and grow, but not like this. Last week, this concern was visible in the minutes of Bank of England’s financial policy committee.

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Posted on by Tim Worstall

There’s An Obvious Answer To Fractional Reserve Banking – It’s A Useful Fraud

It’s entirely true that fractional reserve banking is a fraud, a Ponzi, it’s simply outrageous how credit, or wide money, is created. Murray Rothbard was entirely correct:

In The Mystery of Banking (1983), the anarcho-capitalist economist Murray Rothbard called fractional reserve banking “a shell game, a Ponzi scheme, a fraud in which fake warehouse receipts are issued and circulate as equivalent to the cash supposedly represented by the receipts.”

Nowt wrong with that statement.

That is not, however, the end of it.…

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Posted on by Tim Worstall

There is No Gender Pay Gap at Barclays – it’s Earnings, Not Pay

We’re told that women earn up to 43% less at Barclays than men do. We’re also told that women are paid about half what men are at that same bank, Barclays. Only one of these two statements is true. The one which is true being an interesting revelation of where this screaming match about the gender pay gap is going wrong.

We don’t in fact have a gender pay gap in this modern world. We do have an earnings gap.…

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