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Indeed. Lenders conveniently forget the reason they can charge interest is because there's a risk they won't be paid back. Yet when these private investments

• dragonwriter 6y ago
  > Lenders conveniently forget the reason they can charge interest is because there's a risk they won't be paid back. No, the reason they can charge interest is that they have the money now, and other people want it, and are willing.to pay interest to get it. The reason they need to charge interest if they don't want to go broke is that there is a risk they won't be paid back.
  • orra 6y ago
    Sure, yes. But OTOH I'm not sure the distinction you make is meaningful. If there was no risk, the cost to borrow would tend towards zero. Any liquidity issues could be addressed by the central bank, again at low interest if no risk.
    • tjs8rj 6y ago
      Private banks charge interest in general because that’s the opportunity cost of that money.
      • orra 6y ago
        Interest rates for savers are record low. That's the opportunity cost for the savers. And a central bank of a sovereign country can arbitrarily increase liquidity, pushing down the non-risk part of the interest rate. But interest rates for borrowers, as I said, can be high, depending upon the risk profile.