| Topic: | Re:Re:Re:Supreme court backs bankers | |
| Posted by: | Phil Andrews | |
| Date/Time: | 27/11/09 10:06:00 |
| Alan The "ratio between exposure and funds" is really just a fancy way of saying how much of other people's money they are in a position to lend out at a profit to themselves. This is the nub of it - the money which banks lend out is not their own. It belongs to us. They lend our money to other people and profit from doing so. That is what a bank does. If, collectively, individuals and business were to ask tomorrow to withdraw one tenth of the funds that are currently deposited with the banks they would not be able to do so, because the banks wouldn't have enough money to pay them. It will have been lent out elsewhere. The recent problems faced by the banks came about because the banks, fired by greed, lent out a rather more generous proportion of our money than they ought to have done. So the bottom line is that if we are irresponsible (or merely careless) with our money we pay the banks. If the banks themselves are irresponsible with our money we pay the banks. Isn't finance capitalism wonderful? |