Government
sponsored insurance is a bad thing, its up to banks to decide if they
want to offer insurance, if it is a thing most banks must do.
But I believe there is no ground on regulating/auto-regulating for a
deposit insurance. If things go wrong no private or government
‘treasury’ would be ever able to guarantee the deposits of decades of
thousands of people. The regulation should be targeted in other things.
The fact the people were buying bonds from other people of whom their
conmpanies used leverage 50:1 makes me wonder about the maturity of the
banking market. Of course I do believe though, the bankers know better
thatn anyone on how to regulate their own market.
Given
the lack of confidence markets have in the banking system ever picking
itself off the ground, and the threat of a run on banks quite present I
think a short term deposit guarantee is a good thing. But only short
term.
After all, Australian banking system does not exist in isolation, and
anyone that wants to make sure their money is somewhat safe (safer than
under the mattress) will just move it to a more friendly environment,
such as Ireland.
To have principles is great, but you need to live to keep them. :-)
In other words, I far more prefer to be a pragmatist and keep my money
where it is insured than stay dye-in-the-wool free-market believer and
lose my shirt for it.
“Of course I do believe though, the bankers know better thatn anyone on how to regulate their own market.”
They have absolutely no idea. They are proven failures. They are
crooks. Counterfeiters and inflationists to a man. If they had any idea
do you think they would have white-anted the USA from within.
Fractional reserve is inherently fraudulent. And the source of every bank crisis. But this time its ruining whole countries.
3 comments
18 October, 2008 at 15:13
JimGr
Government sponsored insurance is a bad thing, its up to banks to decide if they want to offer insurance, if it is a thing most banks must do.
But I believe there is no ground on regulating/auto-regulating for a deposit insurance. If things go wrong no private or government ‘treasury’ would be ever able to guarantee the deposits of decades of thousands of people. The regulation should be targeted in other things. The fact the people were buying bonds from other people of whom their conmpanies used leverage 50:1 makes me wonder about the maturity of the banking market. Of course I do believe though, the bankers know better thatn anyone on how to regulate their own market.
20 October, 2008 at 09:06
Saso
Given the lack of confidence markets have in the banking system ever picking itself off the ground, and the threat of a run on banks quite present I think a short term deposit guarantee is a good thing. But only short term.
After all, Australian banking system does not exist in isolation, and anyone that wants to make sure their money is somewhat safe (safer than under the mattress) will just move it to a more friendly environment, such as Ireland.
To have principles is great, but you need to live to keep them. :-) In other words, I far more prefer to be a pragmatist and keep my money where it is insured than stay dye-in-the-wool free-market believer and lose my shirt for it.
20 October, 2008 at 09:22
Graeme Bird
“Of course I do believe though, the bankers know better thatn anyone on how to regulate their own market.”
They have absolutely no idea. They are proven failures. They are crooks. Counterfeiters and inflationists to a man. If they had any idea do you think they would have white-anted the USA from within.
Fractional reserve is inherently fraudulent. And the source of every bank crisis. But this time its ruining whole countries.