There are two
mistakes he makes over and over, both of which play straight into the hands of
banksters.
First, he
opposes imposing higher capital requirements on banks, particularly in a
recession, because it would allegedly be some sort of burden on banks which
would make it more difficult for banks to lend. The flaw in that argument was
pointed out by Franco Modigliani and Merton Miller, the flaw being that the proportion
of a bank’s funding that comes from shareholders does not influence the total
cost of funding the bank. For more on that, see this Bank of England discussion
paper.
Banks’ REAL
MOTIVE for minimising capital is that it increases taxpayer exposure. That is, what
banksters want is a system under which when their bets pay off, they keep the
winnings, and when the bets go wrong, the taxpayer foots the bill.
Second, Vince
Cable keeps going on about the need to encourage bank lending to businesses.
Well banksters will love him for that, won’t they? Nothing must be done to hinder
banks! The ACTUAL EVIDENCE is that access to finance comes a long way down
employers’ list of concerns. E.g see:
p.7 here,
Section 2.7 here.
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