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That's like saying the purpose of a supermarket is to convert investment into grocery sales. It might be true at some level, but isn't what people describe as t
by hgomersall 4y ago
That's like saying the purpose of a supermarket is to convert investment into grocery sales. It might be true at some level, but isn't what people describe as the purpose of a supermarket. Banks are entities for making loans. They are heavily regulated in how they do that, and part of that does come with capitalization requirements, but the purpose of a bank is to make loans.
- ClumsyPilot 4y agoHow did you square your definition with the fact that some banks make no loans at all? You don't need to be a bank to make a loan, I can lend money. Me and you are regulated more than the banks are, because we are not allowed to do things banks do. Legally the 'bank' means you have a banking licence. That is all. This licence allows you to create money. This is a huge superpower, but there are terms and conditions attached to make sure it doesn't break the whole economy.
- hgomersall 4y agoThey also provide payment services in the modern world, and it's not intended to be definitional. You can create money, you just can't pass that around the monetary framework. That's what the license is really about. It doesn't feel we disagree. What you wrote I totally agree with.