The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Remember that?)Background to banking and the monetary system
Money In The Australian Economy (rba.gov.au)
Central banks can fight inflation without massive handouts to banks – OMFIF
Big Banks
The primary responsibility of the big banks is not to serve as a public utility but to deliver to share holders a return on their investments. One of the ways to make easy and low risk profits is to create money by issuing loans for mortgages. They have almost no risk when lending mortgages because the house is an asset that can be sold and there is insurance if the loan to equity is greater than 80%.
The graph below shows how house prices have almost doubled relative to earning in the last 25 years making housing less affordable. Its not the banks fault, it is the monetary system that incentivises them to do this that is at fault.
Positive Money UK has produced a number of useful videos to explain how money works in their Banking 101 series.
Go to their YouTube channel for additional video resources.
https://www.youtube.com/@PositiveMoneyUK
Banking 101
Misconceptions around Banking – Banking 101 (Part 1 of 6)
What’s wrong with the money multiplier? – Banking 101 (Part 2 of 6)
How is money really made by banks? – Banking 101 (Part 3 of 6)
How much money can banks create – Banking 101 (Part 4 of 6)
Do banks create money or just credit? – Banking 101 (Part 5 of 6)
How money gets destroyed – Banking 101 (Part 6 of 6)
Background to the 2008 financial crisis
The global financial crisis of 2008 and ongoing scandals in the financial sector make it abundantly clear that the financial system needs to be made publicly accountable in order to serve the public good.
The scale of the problem is reflected in the penalties applied to the the financial services “industry” around globe as recorded by the organisation Good Jobs First. Good Jobs First set themselves the task to expose malpractice across the corporate sector by creating a database of violations that resulted in a financial penalty.
Click here to view a summary from the finance sector since 2010.