The financial crisis showed that bankers have the British public over a barrel. When banks do well, the bankers are awarded huge bonuses. When they do badly, the taxpayer has to step in and save them or face the consequences of systemic collapse of the payment system. Bankers can just 'make the money and run', leaving the government to pick up the pieces when things go wrong. The Vickers Commission was meant to put a stop to this by safeguarding ordinary retail banks from the gambling of investment banks. Laurence J. ...
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The financial crisis showed that bankers have the British public over a barrel. When banks do well, the bankers are awarded huge bonuses. When they do badly, the taxpayer has to step in and save them or face the consequences of systemic collapse of the payment system. Bankers can just 'make the money and run', leaving the government to pick up the pieces when things go wrong. The Vickers Commission was meant to put a stop to this by safeguarding ordinary retail banks from the gambling of investment banks. Laurence J. Kotlikoff shows that the Vickers proposals fail to do this. Even banks deemed 'good' can turn bad, since no one can predict which 'safe' assets will actually be safe in the future. Moreover, 'bad' banks are still left too big and too powerful. If they fail, they will drag ordinary banks down with them, freezing the payment system and creating a recession in the wider economy. Kotlikoff's alternative, Limited Purpose Banking (LPB), replaces the current system of 'trust-me' banking with the more transparent 'show-me' banking. LPB bans banks from holding anything except mutual funds. Mutual funds hold no debt, so they cannot individually, or systemically, fail. The payment system would use on-demand deposits that are backed pound-for-pound by actual cash. Bankers would not be allowed to lend out their customers' money without explicit permission and full disclosure of the risks. Large private losses could still take place within the financial system but without endangering the rest of the economy or burdening taxpayers. In short, Kotlikoff's proposal stops bankers from being able to gamble with other people's money.
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Good. Ships from UK in 48 hours or less (usually same day). Your purchase helps support Sri Lankan Children's Charity 'The Rainbow Centre'. Ex-library, so some stamps and wear, but in good overall condition. 100% money back guarantee. We are a world class secondhand bookstore based in Hertfordshire, United Kingdom and specialize in high quality textbooks across an enormous variety of subjects. We aim to provide a vast range of textbooks, rare and collectible books at a great price. Our donations to The Rainbow Centre have helped provide an education and a safe haven to hundreds of children who live in appalling conditions. We provide a 100% money back guarantee and are dedicated to providing our customers with the highest standards of service in the bookselling industry.