Comments on: Martin Wolf: Banks Hold Central Bankers Hostage http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html Mon, 23 Nov 2009 05:40:52 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: dearieme http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-2797 dearieme Tue, 01 Jan 2008 14:05:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-2797 Longer term, how about introducing a higher rate of Corporation Tax for any business with a Banking Licence? That way, the taxpayer gets a bigger share of the good years, which seems right if he's going to be lumbered with a big share of the bad times. Longer term, how about introducing a higher rate of Corporation Tax for any business with a Banking Licence? That way, the taxpayer gets a bigger share of the good years, which seems right if he’s going to be lumbered with a big share of the bad times.

]]> By: Kien http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-917 Kien Sun, 23 Sep 2007 12:23:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-917 Perhaps the UK government should put it to the other banks that they must (within a specified date) publicly guarantee the solvency of the Northern Rock and other banks in a similar position, failing which it is open to the government to assert a stronger regulatory role over those banks. Perhaps the UK government should put it to the other banks that they must (within a specified date) publicly guarantee the solvency of the Northern Rock and other banks in a similar position, failing which it is open to the government to assert a stronger regulatory role over those banks.

]]> By: Anonymous http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-916 Anonymous Sat, 22 Sep 2007 20:45:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-916 More than new regulations and oversight is needed; the whole design needs to be reworked. The prudent intentions of depositors should be strictly and institutionally separated from the speculative and risky operations of lending. Banks should be, and only be, institutions that store and safeguard money and provide strictly limited services: checking, wiring, deposit boxes, cashier’s checks, verification of funds, etc. The funds in these accounts should be guaranteed by careful regulation and monitoring of institutions authorized to provide these services. No bailouts are necessary at all because the money is always there. The highly speculative lending operations, whether it be for mortgages, credit cards, student loans, car loans, commercial real estate etc. should be left to separate institutions with no government guarantee whatsoever. Individuals could decide to participate in these speculative ventures, but the government has no business guaranteeing them.<br/><br/>This would of course be very upsetting to banks that are used to the clueless common man making deposits for safekeeping that the bank can turn around and speculate with without the depositor really knowing what is being done with the deposited money. Does the common depositor placing funds in a savings account really want that money to be used to fund that wildly speculative office and condo tower down by the waterfront? Probably not. Does the common depositor know it is being used thusly? Probably not. We currently have the absurd spectacle of the government guaranteeing deposits simply so that bankers can speculate and make profits, so that private shareholders can reap rewards while the public shoulders the liabilities.<br/><br/>The functions of safeguarding savings and speculative lending should be separated institutionally. There is nothing wrong with speculative lending operations and they are healthy for an economy. However, to have these operations be done with ordinary peoples’ savings that are intended as savings is, to put it bluntly, a disingenuous sleight of hand and idiocy in the service of greed. The banks should never have been exposed to this mess, and that they are is evidence of faulty design, and not a design that needs further tweaking like some flawed Ptolemaic system, but rather one that needs a new and honest vision that serves the ordinary people of society in a transparent way rather than serving its governing elites through an elaborate deception. <br/><br/>JS More than new regulations and oversight is needed; the whole design needs to be reworked. The prudent intentions of depositors should be strictly and institutionally separated from the speculative and risky operations of lending. Banks should be, and only be, institutions that store and safeguard money and provide strictly limited services: checking, wiring, deposit boxes, cashier’s checks, verification of funds, etc. The funds in these accounts should be guaranteed by careful regulation and monitoring of institutions authorized to provide these services. No bailouts are necessary at all because the money is always there. The highly speculative lending operations, whether it be for mortgages, credit cards, student loans, car loans, commercial real estate etc. should be left to separate institutions with no government guarantee whatsoever. Individuals could decide to participate in these speculative ventures, but the government has no business guaranteeing them.

This would of course be very upsetting to banks that are used to the clueless common man making deposits for safekeeping that the bank can turn around and speculate with without the depositor really knowing what is being done with the deposited money. Does the common depositor placing funds in a savings account really want that money to be used to fund that wildly speculative office and condo tower down by the waterfront? Probably not. Does the common depositor know it is being used thusly? Probably not. We currently have the absurd spectacle of the government guaranteeing deposits simply so that bankers can speculate and make profits, so that private shareholders can reap rewards while the public shoulders the liabilities.

The functions of safeguarding savings and speculative lending should be separated institutionally. There is nothing wrong with speculative lending operations and they are healthy for an economy. However, to have these operations be done with ordinary peoples’ savings that are intended as savings is, to put it bluntly, a disingenuous sleight of hand and idiocy in the service of greed. The banks should never have been exposed to this mess, and that they are is evidence of faulty design, and not a design that needs further tweaking like some flawed Ptolemaic system, but rather one that needs a new and honest vision that serves the ordinary people of society in a transparent way rather than serving its governing elites through an elaborate deception.

JS

]]> By: a http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-915 a Sat, 22 Sep 2007 05:28:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-915 Excellent post. Perhaps banks and financial service companies generally need to be taxed at a (much) higher rate? Excellent post. Perhaps banks and financial service companies generally need to be taxed at a (much) higher rate?

]]> By: Anonymous http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-913 Anonymous Fri, 21 Sep 2007 20:26:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-913 So let me get this straight. The commercial banks plan for endless cheap liquidity is dependent on bankrupt governments forcing bankrupt taxpayers to bail out bankrupt financial institutions. I believe this is what they call the 'Mugabe put'. So let me get this straight. The commercial banks plan for endless cheap liquidity is dependent on bankrupt governments forcing bankrupt taxpayers to bail out bankrupt financial institutions. I believe this is what they call the ‘Mugabe put’.

]]> By: Yves Smith http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-912 Yves Smith Fri, 21 Sep 2007 20:09:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-912 FYI, the deleted post at 4:05 PM was a duplicate. FYI, the deleted post at 4:05 PM was a duplicate.

]]> By: Yves Smith http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-911 Yves Smith Fri, 21 Sep 2007 20:05:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-911 Anon of 2:20 PM,<br/><br/>Whoops. You are absolutely correct and I've fixed the post.<br/><br/>Thanks also for your kind words. Anon of 2:20 PM,

Whoops. You are absolutely correct and I’ve fixed the post.

Thanks also for your kind words.

]]> By: Anonymous http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-910 Anonymous Fri, 21 Sep 2007 19:41:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-910 Yves,<br/><br/>I think that Hamilton is a UCSD economist.<br/><br/>Great blog BTW! Yves,

I think that Hamilton is a UCSD economist.

Great blog BTW!

]]> By: IrishSmirish http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers.html#comment-909 IrishSmirish Fri, 21 Sep 2007 18:20:00 +0000 http://www.nakedcapitalism.com/2007/09/martin-wolf-banks-hold-central-bankers-hostage/#comment-909 The supposedly supreme model that is the "western democracy" is not a democracy at all but merely a cleverly disguised oligarchy (and why should we be surprised, the greek version from which this is derived was the same as well!). And what the west wants through its WTO, IMF, World bank and Kyoto protocols is the imposition of this on a global scale, with the part of the oligarchs being played by the West. The supposedly supreme model that is the “western democracy” is not a democracy at all but merely a cleverly disguised oligarchy (and why should we be surprised, the greek version from which this is derived was the same as well!). And what the west wants through its WTO, IMF, World bank and Kyoto protocols is the imposition of this on a global scale, with the part of the oligarchs being played by the West.

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