{"id":3443,"date":"2012-02-08T02:11:38","date_gmt":"2012-02-08T07:11:38","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=3443"},"modified":"2012-02-08T02:11:38","modified_gmt":"2012-02-08T07:11:38","slug":"new-economic-perspectives-banks-werent-meant-to-be-like-this-what-will-their-future-be-and-what-is-the-governments-proper-financial-role","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2012\/02\/08\/new-economic-perspectives-banks-werent-meant-to-be-like-this-what-will-their-future-be-and-what-is-the-governments-proper-financial-role\/","title":{"rendered":"New Economic Perspectives: Banks Weren\u2019t Meant to Be Like This. What Will their Future Be \u2013 and What is the Government\u2019s Proper Financial Role?"},"content":{"rendered":"<p>So we are brought back to the question of what the proper role of banks should be. This issue was discussed exhaustively prior to World War I&#8230;&#8230;&#8230;<\/p>\n<p>It was above all in Germany that long-term financing found its expression in the Reichsbank and other large industrial banks as part of the \u201choly trinity\u201d of banking, industry and government planning under Bismarck\u2019s \u201cstate socialism.\u201d German banks made a virtue of necessity. British banks \u201cderived the greater part of their funds from the depositors,\u201d and steered these savings and business deposits into mercantile trade financing. This forced domestic firms to finance most new investment out of their own earnings. By contrast, Germany\u2019s \u201clack of capital \u2026 forced industry to turn to the banks for assistance,\u201d noted the financial historian George Edwards. \u201cA considerable proportion of the funds of the German banks came not from the deposits of customers but from the capital subscribed by the proprietors themselves.[3] As a result, German banks \u201cstressed investment operations and were formed not so much for receiving deposits and granting loans but rather for supplying the investment requirements of industry.\u201d<\/p>\n<p>via <a href='http:\/\/www.neweconomicperspectives.org\/2012\/01\/banks-werent-meant-to-be-like-this-what.html'>New Economic Perspectives: Banks Weren\u2019t Meant to Be Like This. What Will their Future Be \u2013 and What is the Government\u2019s Proper Financial Role?<\/a>.<\/p>\n<p>\nComment:~ The author contrasts the short-term focus of modern banks with the long-term outlook of the early German banking system which was largely equity-funded, rather than deposit-based. The question is: could we ever successfully return to such a system?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>So we are brought back to the question of what the proper role of banks should be. This issue was discussed exhaustively prior to World War I&#8230;&#8230;&#8230; It was above all in Germany that long-term financing found its expression in the Reichsbank and other large industrial banks as part of the \u201choly trinity\u201d of banking, &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2012\/02\/08\/new-economic-perspectives-banks-werent-meant-to-be-like-this-what-will-their-future-be-and-what-is-the-governments-proper-financial-role\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;New Economic Perspectives: Banks Weren\u2019t Meant to Be Like This. What Will their Future Be \u2013 and What is the Government\u2019s Proper Financial Role?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31],"tags":[381,1453],"class_list":["post-3443","post","type-post","status-publish","format-standard","hentry","category-the-fed-banks-interest-rates","tag-banks","tag-fractional-reserve-banking-system"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>New Economic Perspectives: Banks Weren\u2019t Meant to Be Like This. What Will their Future Be \u2013 and What is the Government\u2019s Proper Financial Role? - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Economic Perspectives: Banks Weren\u2019t Meant to Be Like This. What Will their Future Be \u2013 and What is the Government\u2019s Proper Financial Role? - the patient investor\" \/>\n<meta property=\"og:description\" content=\"So we are brought back to the question of what the proper role of banks should be. This issue was discussed exhaustively prior to World War I&#8230;&#8230;&#8230; It was above all in Germany that long-term financing found its expression in the Reichsbank and other large industrial banks as part of the \u201choly trinity\u201d of banking, &hellip; Continue reading &quot;New Economic Perspectives: Banks Weren\u2019t Meant to Be Like This. 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The central bank has kept its deposit rate at minus 0.2 percent since July, in an effort to fight off a\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2581,"url":"https:\/\/thepatientinvestor.com\/index.php\/2011\/12\/08\/eu-to-banks-raise-capital-wsj-com\/","url_meta":{"origin":3443,"position":1},"title":"EU to Banks: Raise Capital &#8211; WSJ.com","author":"ColinTwiggs","date":"December 8, 2011","format":false,"excerpt":"LONDON\u2014European banks must come up with a total of \u20ac114.7 billion ($153.8 billion) in new capital by next June, the European Banking Authority said Thursday, as regulators took their latest stab at restoring confidence in the Continent's beleaguered banking industry. 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Now the RBNZ has announced plans to force the big\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9584,"url":"https:\/\/thepatientinvestor.com\/index.php\/2014\/03\/27\/andreas-dombret-what-is-going-on-in-europe-the-view-from-within\/","url_meta":{"origin":3443,"position":4},"title":"Andreas Dombret: What is going on in Europe? The view from within","author":"ColinTwiggs","date":"March 27, 2014","format":false,"excerpt":"From a speech by Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, at the New York Stock Exchange, New York, 26 March 2014: How do we get to the end of the tunnel?At the European level, the most important project is the banking union. The banking\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7326,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/03\/27\/forget-too-big-to-fail-kill-the-fractional-reserve-banking-system\/","url_meta":{"origin":3443,"position":5},"title":"Forget too-big-to-fail: Kill the fractional reserve banking system","author":"ColinTwiggs","date":"March 27, 2013","format":false,"excerpt":"Interesting discussion on Bloomberg about currency-backed deposits and equity-funded loans. The fractional reserve banking system is the primary cause of instability and asset bubbles in the global economy, allowing banks to create money out of thin air. Credit expansion above the rate of real GDP growth has only two possible\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/3443","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=3443"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/3443\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=3443"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=3443"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=3443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}