The Irish Central Bank failed in its regulatory function - as did all Western Central banks. If the Western central banking system had carried out its statutory duties there would not have been a crisis in 2007/8. And since then, as Dr Honohan pointed out, nothing adequate has been done to address the root causes of the crisis. In my opinion the root causes are deregulation of the banking system and financial speculation - especially derivatives.
The way the banking system works is the major cause of 2008 crises. By creating money out of nothing they increase agregate demmand and also income, causing a bubble to inflate. The issue here is private debt and NOT public debt.
Luís Veiga Yes that is right. The private banking system was permitted to create a massive credit/debt bubble. Most of the money in our system is created by private banks and financial institutions as credit/debt. In my opinion private banks should not be permitted to create money.
+David Walsh In orther for that (non creation of credit money by banks) you must do one fo two things: 1- Nationalize the banking sector and substitute the banks by credit unions backed by the state, where the state becomes (again) the only issuer of new money; 2- Make banks use the loanable funds, where they would only lend the amount of deposits they have plus their own equity, becoming 100% solvable if they fail.
Luís Veiga Yes I agree generally with you; but I dont think it's either/or. I think both of your suggestions could be part of a rational and equitable monetary system and economy. Personally I think money creation and management should be sovereign and thus under public control.
+Luís Veiga That will ensure that there is failure as have most other nationalised industries which automatically become polticall run monoplopies rather than run on competition lines which requires them to look after themselves financially.
Ireland's housing bubble is derived largely from ECB policy which went to from above 3% to 1% to back. Bailing out the banks rather than letting asset prices clear has resulted in severe malinvestments which detract from growth. So-called "stimulus" simply transfers money from the private sector to the less efficient public sector.
The truth of the matter is the ECB saw an opportunity to destroy Ireland and our “politicians” went along with it instead of fighting the case of the Irish people
The Irish Central Bank failed in its regulatory function - as did all Western Central banks.
If the Western central banking system had carried out its statutory duties there would not have been a crisis in 2007/8.
And since then, as Dr Honohan pointed out, nothing adequate has been done to address the root causes of the crisis.
In my opinion the root causes are deregulation of the banking system and financial speculation - especially derivatives.
The way the banking system works is the major cause of 2008 crises. By creating money out of nothing they increase agregate demmand and also income, causing a bubble to inflate. The issue here is private debt and NOT public debt.
Luís Veiga
Yes that is right. The private banking system was permitted to create a massive credit/debt bubble. Most of the money in our system is created by private banks and financial institutions as credit/debt. In my opinion private banks should not be permitted to create money.
+David Walsh
In orther for that (non creation of credit money by banks) you must do one fo two things:
1- Nationalize the banking sector and substitute the banks by credit unions backed by the state, where the state becomes (again) the only issuer of new money;
2- Make banks use the loanable funds, where they would only lend the amount of deposits they have plus their own equity, becoming 100% solvable if they fail.
Luís Veiga
Yes I agree generally with you; but I dont think it's either/or. I think both of your suggestions could be part of a rational and equitable monetary system and economy.
Personally I think money creation and management should be sovereign and thus under public control.
+Luís Veiga That will ensure that there is failure as have most other nationalised industries which automatically become polticall run monoplopies rather than run on competition lines which requires them to look after themselves financially.
Ireland's housing bubble is derived largely from ECB policy which went to from above 3% to 1% to back. Bailing out the banks rather than letting asset prices clear has resulted in severe malinvestments which detract from growth. So-called "stimulus" simply transfers money from the private sector to the less efficient public sector.
The truth of the matter is the ECB saw an opportunity to destroy Ireland and our “politicians” went along with it instead of fighting the case of the Irish people
an awful waffler who dodged the question 4:37