AnimeSuki Forum - View Single Post

monsta666 · 2013-03-22, 10:55

The idea of putting a bank levy on savings accounts to fund a bailout is tantamount to theft. What is more this policy goes against the basic promises made in the aftermass of the 2007-2008 financial crisis when various banking reforms were put in place to insure that any accounts upto €100,000 would be insured. This proposal breaches this agreement and thus breaks the trust between banks and depositors that their funds will not be raided in the next bailout. How anyone can justify this course of actions is beyond me. The depositors of these banks have no influence in the lending practices of the bank so I fail to see how they can be held responsible nevermind punished for extravagant spending of other parties (be it the banks or other customers). The banks have a lot of tools and resources to measure and assess risk so the argument of ignorance are not really valid. Sure we can also blame irresponsible lenders but since the banks have more sophisticated tools to identify risk the main blame should lie with them. Yet as we have it, it is the debtors and not the creditors (banks and bondholders) who are getting the shaft here.

As to the issue and morals of repaying debt while I can understand it is important to pay ones dues there is a important caveat that is often not said in this debate. When paying someone back the moral obligation to pay them back is only really applicable if the lender actually owns the asset or cash in question. Due to the way commercial banks lend money out of thin air through the fractional reserve system most of the money lent was not owned by them to begin with. It was created into existence. If the banks lend money that is not theirs then it raises the issue of whether it is morally right they should demand payment with interest. If I borrowed my mates car but lent out to you with a charge would that be morally right? In any case though it is somewhat academic because a lot of the debt we see today will never be repaid. Politicians and banks have to acknowledge this fact and find a more equitable way of distributing the loses. Problem is no one wants to hold the empty bag when the music stops so they will try and shift the losses to the weakest parties who are less able to defend their own interests.

2013-03-22, 10:55	Link #19
monsta666 Senior Member Join Date: Jan 2012 Location: London, England Age: 37	The idea of putting a bank levy on savings accounts to fund a bailout is tantamount to theft. What is more this policy goes against the basic promises made in the aftermass of the 2007-2008 financial crisis when various banking reforms were put in place to insure that any accounts upto €100,000 would be insured. This proposal breaches this agreement and thus breaks the trust between banks and depositors that their funds will not be raided in the next bailout. How anyone can justify this course of actions is beyond me. The depositors of these banks have no influence in the lending practices of the bank so I fail to see how they can be held responsible nevermind punished for extravagant spending of other parties (be it the banks or other customers). The banks have a lot of tools and resources to measure and assess risk so the argument of ignorance are not really valid. Sure we can also blame irresponsible lenders but since the banks have more sophisticated tools to identify risk the main blame should lie with them. Yet as we have it, it is the debtors and not the creditors (banks and bondholders) who are getting the shaft here. As to the issue and morals of repaying debt while I can understand it is important to pay ones dues there is a important caveat that is often not said in this debate. When paying someone back the moral obligation to pay them back is only really applicable if the lender actually owns the asset or cash in question. Due to the way commercial banks lend money out of thin air through the fractional reserve system most of the money lent was not owned by them to begin with. It was created into existence. If the banks lend money that is not theirs then it raises the issue of whether it is morally right they should demand payment with interest. If I borrowed my mates car but lent out to you with a charge would that be morally right? In any case though it is somewhat academic because a lot of the debt we see today will never be repaid. Politicians and banks have to acknowledge this fact and find a more equitable way of distributing the loses. Problem is no one wants to hold the empty bag when the music stops so they will try and shift the losses to the weakest parties who are less able to defend their own interests.