tag:blogger.com,1999:blog-8764541874043694159.post488843282261727431..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: Spot the differenceFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8764541874043694159.post-66766265014919729132012-02-27T18:14:30.476+00:002012-02-27T18:14:30.476+00:00Yes,that's a fair point, Ann. Banks only "...Yes,that's a fair point, Ann. Banks only "need" capital for lending to the extent that regulators enforce that need. Strictly, they could run on close to 100% debt/equity - and indeed many banks did so prior to 2008.<br /><br />Certainly their balance sheets are a mess, and I agree that even without increased capital requirements that is a sufficient explanation for the growing credit crunch in Europe and the poor lending figures in the UK.Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-23268640807338200862012-02-27T14:32:54.160+00:002012-02-27T14:32:54.160+00:00Frances, Thanks for this. I do not agree that '...Frances, Thanks for this. I do not agree that 'lending needs capital'. Private banks create credit as easily (and in unregulated ways) as the central bank. That is, they enter numbers into a computer, demand collateral and a promise to repay at a certain rate of interest. The loan is then deposited as bank money in the account of the borrower. <br /><br />The reason that banks are not lending is because they have massive and growing liabilities and losses....for each loan they have made (which has become a deposit in a bank) they expect repayment...And with rising unemployment, bankruptcies etc...repayments look less likely. That is why they are not lending; their balance sheets look very, very bad....Ann Pettiforhttp://www.debtonation.orgnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-9777679147772852892012-02-27T13:44:26.823+00:002012-02-27T13:44:26.823+00:00Not only is it total madness, it's the repetit...Not only is it total madness, it's the repetition of the same old behaviour that bust the West's economies back in 2007/8.<br />The only genuine recovery possible is valuable securities in the form of commodities or precious metals. Ergo living within means. Now that doesn't run a cycle convenient for the façade of electoral gain. So democracy has to be sacrificed in order to keep this ponzi viscous circle turning.Oldrightiehttps://www.blogger.com/profile/03192587284458430556noreply@blogger.com