Hasierarako, ikus Bankugintzaz hiru hitz (1)
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Bankugintza: bankuen nazionalizazioaz
Both public and private banks are very dangerous animals…
(Warren Mosler)
Bankuak eta beraien nazionalizazioaz
E-posten trukaketa: (gorriz, Warren Mosler-ena)
Nork: . <josebafelix@outlook.es>
Bidaltze-data: asteartea, 2017(e)ko azaroaren 14a 08:07
Nori: Warren Mosler
Gaia: Doubt
Hi Warren.
Here a doubt I have been dealing with for some time: Banks and their nazionalization
(…)
Nork: Warren Mosler <>
Bidaltze-data: asteazkena, 2017(e)ko azaroaren 15a 01:01
Nori: .
Gaia: Re: Doubt
On Mon, Nov 13, 2017 at 9:07 PM, . <josebafelix@outlook.es> wrote:
Hi Warren.Here a doubt I have been dealing with for some time: Banks and their nazionalizationBill Mitchell is in favor of nationalization:
Banking
Re-nationalising the banking system would eliminate the largely unresolvable tension that exists in the current system where banks occupy a special protected place and are not really allowed to fail by dint of government support (implicit or otherwise) yet at the same time behave just like risk-taking entrepreneurial firms, paying exorbitant executive salaries and skewing their operations to the interests of their shareholders.
except they do fail as defined by the owners losing all their equity.
The tension between the public nature of banking and the intrinsic social role they play and the greedy pursuit of private profit –
That’s where regulation and supervision comes in, as per my proposals.
or the privatisation of profit and the socialisation of loss – is palpable and unsustainable.
Socialization of loss only after shareholders have lost everything.
Nor are govt. net losses all that large, best I can recall. In fact,
many of the ‘bailouts’ resulted in profits for the govt. after 2008
Socialisation the profits and loss and steering the activities of banks 100 per cent towards the advancement of public purpose would go a long way towards eliminating the worst features of the banking system which culminated in the global financial crisis.
And introduce its own set of problems- politicization of lending, as most europeans are painfully aware of after decades of large state owned banks.
The nationalisation of banks would mean that a key social institution is serving only one master – the public rather than compromising its public charter to line the coffers of their private owners.
More specifically, they tend to be biased towards serving those with political power.
When we consider the essential progressive reforms to the financial system in a later blog, a starting point will be to return banks to being banks rather than gambling casinos.
True, again, it’s about regulation and supervision.
Part of that process, should be the re-nationalisation of the banking sector
Both public and private banks are very dangerous animals…
Also in his latest book, Reclaiming the State, pp. 257 ff.It seems to me that you are not in favor of that measure…
as above.
The legislature can advance funds as desired, public banks or no public banks.
That is, the tool for the desired outcomes is already in place.
Warren Mosler, on with Steve Grumbine at Real Progressives, discussing reforms of banking. In order to reform banks, we have to first decide what banks are for and what they should and shouldn’t do. The first purpose of banking is to have a stable payment system. This is infrastructure that undergirds the economy, so that individuals or corporations can make payments. Decades and centuries of experience show that banks on their own cannot create a stable payment system, and instead have a tendency towards bank runs, panics, and financial crises. This is the argument for deposit insurance. With deposit insurance, the government protects bank customers from their bank. It ensures that even in the event of bank failure, customers can still withdraw or transfer their accounts, stabilizing the payment system. Furthermore, centralized payment clearing at a central bank (where the central bank (like the Fed) makes payments between banks) is necessary to ensure that $1 in every bank will actually be equal to $1. Once there is deposit insurance and central banking, the banking system becomes dangerous. This is because they have government guarantees behind their actions, so they cannot fail. It’s like letting a gambler loose in a casino, then saying “you get to keep all of your winnings and the government will pay for all of your losses.” It encourages extreme risk-taking. This therefore demands full banking regulation, to ensure that banks aren’t taking advantage of government protection. The next task of banking is lending. There are many purposes to lending, with probably the most important being the capital development of the economy. So, entrepreneurs and businesses can take out loans in order to finance investment in new technology, jobs, factories, etc. This kind of financing activity is a major contributor to the improvement of quality of life. One question here is, should banks do this? The private sector is capable of lending even without banks doing it. This is what the bond market does, and what private companies can do to finance their customers’ purchases (think auto loans from a car company). However, there are 3 key differences between bank lending and other private sector lending. First, because banks are lending their own IOUs rather than lending from a pre-existing pile of cash, this means that lending for the capital development of the economy is not limited by any quantity of saving. Second, because banks are backed up by government guarantees, they don’t have to lend based on the value of the assets, but can lend based on the ability of the borrower to pay. And third, because banking is heavily regulated by government, it is an opportunity for public policy to shape the development of the economy, by encouraging banks to lend for things that serve public purpose, and discouraging (or banning) lending for things that don’t. Since banks are already functionally public-private-partnerships, should we just nationalize banks and make them all into public institutions? Mosler argues that we should not. The reason is because public banks are subject to political pressures and can make huge losses, therefore public banks are highly susceptible to corruption. With the public-private model, Mosler asserts, the banks have incentive to lend based on risk, not based on political favors.
Those were not my actual words. I don’t argue specifically against public banks, but I do point out the shortcomings
which never seem to be part of the analysis of those who advocate for them.
I have read some texts of yours where you have the same position (of course!!) about nationalizing the banks, i.e., Not to nationalize them.Is this OK?
As above, thanks!
Best!
Warren
Any more arguments?
Thanks a lot.
Best.
Joseba
Warren Mosler
Valance Company, Inc.
5000 Southgate
Christiansted, USVI 00820
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Nork: . <josebafelix@outlook.es>
Bidaltze-data: asteazkena, 2017(e)ko azaroaren 15a 02:14
Nori: Warren Mosler
Gaia: ER: Doubt
Thank you very much!!!!
Best.
joseba
oooooooooooo
Nork: Warren Mosler <>
Bidaltze-data: asteazkena, 2017(e)ko azaroaren 15a 02:16
Nori: .
Gaia: Re: ER: Doubt
always glad to help!
On Tue, Nov 14, 2017 at 3:14 PM, . <josebafelix@outlook.es> wrote:
oooooooooooooo
