3 ms·

Wasn't lending money with interest restricted to banks to control how much money is created? I'm guessing they're still regulated, but it still seems weird.

• rahimnathwani 1y ago
  Have you never held a savings account or bought a bond? Those are both ways to ‘lend money with interest’.
  • dietr1ch 1y ago
    Yes, but managed by banks. That's my observation, it's new to me that non-banks are allowed to lend with interest.
    • rahimnathwani 1y ago
      If some company wants to lend money to an individual or another company, the risk is borne entirely by the lender. Apart from regulating collection practices and fairness in consumer lending, there's little reason for regulation. Bank regulations in most countries are usually focused on deposits (i.e. banks borrowing money). Because a poorly managed (or unscrupulous) bank could cause problems for parties other than the bank. Nice article about money creation: https://cepr.org/voxeu/columns/banks-do-not-create-money-out-thin-air https://cepr.org/voxeu/columns/banks-do-not-create-money-out...