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I don’t understand how we keep allowing this industry having such a huge impact on people’s lives. They makes tons of money when things are good and when they b

I don’t understand how we keep allowing this industry having such a huge impact on people’s lives. They makes tons of money when things are good and when they blow up, the whole economic policy needs to be adjusted for years and decades to come as we have seen after 2008. The idea of a “financial system” should be rethought so there is a stable banking system that actually serves the economy instead of dominating it. Let the gamblers blow themselves up but they need to be contained. It’s really insane what is going on.

nine_zeros 4y ago
I agree. I don't understand why the entire population of the world should be a slave to a clearly broken fractional reserve system. What is stopping someone from creating banks that take ZERO risk but just let people park money for a fee?
- lotsofpulp 4y ago
  Because bank operations cost money, and given that the federal government guarantees deposits of $250k per bank per account holder, it makes no sense to patronize a bank that will charge depositors to use the bank, plus offer less interest compared to a bank that offers free services and more interest.
- temptemptemp111 4y ago
  [dead]
- armada651 4y ago
  There's nothing stopping anyone from creating such a bank, but in economic times with high interest no one would put their money into a bank that doesn't pay interest as they would have no hope of keeping pace with inflation. Also, if every bank operated in this way then no one would be able to get a loan and debt drives the modern economic systems. Meaning no one would be able to make investments based on debt anymore, at least not with a loan from a bank.
- cykros 4y ago
  Banks can hardly get people to park their money in them right now because of the fact that they don't pay ENOUGH interest -- everyone's been pulling money out to jump into money market mutual funds with their liquid cash, or short term fixed income products where they can afford to tie it up for a few months. I suspect the short answer is "lack of demand."
- tome 4y ago
  It's called "narrow banking" and apparently it doesn't make things as safe as you might think. Here's some reading: https://www.cato.org/sites/cato.org/files/serials/files/regulation/1991/4/v14n2-5.pdf https://www.cato.org/sites/cato.org/files/serials/files/regu... https://www.johnkay.com/2011/06/02/should-we-have-narrow-banking/ https://www.johnkay.com/2011/06/02/should-we-have-narrow-ban...
  - nine_zeros 4y ago
    But it could be an option? I imagine there is a market for it. No one is asking current banking to be abolished but at least there should be an option for people who want to keep their money away from fractional reserve.
    - tome 4y ago
      Seems reasonable to me. I'd probably use it!
- nathanaldensr 4y ago
  I had heard somewhere that the Fed doesn't allow for narrow banks to exist. I haven't verified this for myself, however.
bell-cot 4y ago
The bankers are very well paid, the politicians are very well paid-off, and "we" has a very poor record of actually showing up at the table when decisions are being made on such matters.
- taylodl 4y ago
  My cynical self says this is the primary reason for political rhetoric - to distract the populace from what's really going on that will have a direct impact on their lives. Such as banking. I don't care which political religion you subscribe to, people need to understand all politicians worship the same god: money, and all the power money provides. Our "leaders" aren't serving their country, they're lining their pockets. With our money. I'm amazed at how docile Americans have been after being robbed so many times. You can thank rhetoric for that.
nathanaldensr 4y ago
Imagine you are them, and you say "What are you going to do about it?" What's the answer you get?

nine_zeros 4y ago

I agree. I don't understand why the entire population of the world should be a slave to a clearly broken fractional reserve system. What is stopping someone from creating banks that take ZERO risk but just let people park money for a fee?

lotsofpulp 4y ago
Because bank operations cost money, and given that the federal government guarantees deposits of $250k per bank per account holder, it makes no sense to patronize a bank that will charge depositors to use the bank, plus offer less interest compared to a bank that offers free services and more interest.
temptemptemp111 4y ago
[dead]
armada651 4y ago
There's nothing stopping anyone from creating such a bank, but in economic times with high interest no one would put their money into a bank that doesn't pay interest as they would have no hope of keeping pace with inflation. Also, if every bank operated in this way then no one would be able to get a loan and debt drives the modern economic systems. Meaning no one would be able to make investments based on debt anymore, at least not with a loan from a bank.
cykros 4y ago
Banks can hardly get people to park their money in them right now because of the fact that they don't pay ENOUGH interest -- everyone's been pulling money out to jump into money market mutual funds with their liquid cash, or short term fixed income products where they can afford to tie it up for a few months. I suspect the short answer is "lack of demand."
tome 4y ago
It's called "narrow banking" and apparently it doesn't make things as safe as you might think. Here's some reading: https://www.cato.org/sites/cato.org/files/serials/files/regulation/1991/4/v14n2-5.pdf https://www.cato.org/sites/cato.org/files/serials/files/regu... https://www.johnkay.com/2011/06/02/should-we-have-narrow-banking/ https://www.johnkay.com/2011/06/02/should-we-have-narrow-ban...
- nine_zeros 4y ago
  But it could be an option? I imagine there is a market for it. No one is asking current banking to be abolished but at least there should be an option for people who want to keep their money away from fractional reserve.
  - tome 4y ago
    Seems reasonable to me. I'd probably use it!
nathanaldensr 4y ago
I had heard somewhere that the Fed doesn't allow for narrow banks to exist. I haven't verified this for myself, however.

bell-cot 4y ago

The bankers are very well paid, the politicians are very well paid-off, and "we" has a very poor record of actually showing up at the table when decisions are being made on such matters.

taylodl 4y ago
My cynical self says this is the primary reason for political rhetoric - to distract the populace from what's really going on that will have a direct impact on their lives. Such as banking. I don't care which political religion you subscribe to, people need to understand all politicians worship the same god: money, and all the power money provides. Our "leaders" aren't serving their country, they're lining their pockets. With our money. I'm amazed at how docile Americans have been after being robbed so many times. You can thank rhetoric for that.

nathanaldensr 4y ago

Imagine you are them, and you say "What are you going to do about it?" What's the answer you get?