Article

2011-09-14 Economy

Europe's banks are staring into the abyss

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Posted by lotp 2011-09-14 00:00|| || Front Page|| [2 views ] Top

#1 The proximate cause of the crisis was government's demand that banks enhance liquidity by buying government bonds, bonds which have now collapsed. But in the bigger picture, doesn't it come down to the inherent instability of fractional reserve banking, as Austrian economists claim?

Posted by Glusoger Gruter1463 2011-09-14 08:10|| 2011-09-14 08:10|| Front Page Top

#2 Do the abyss stares back?

Posted by g(r)omgoru 2011-09-14 13:52|| 2011-09-14 13:52|| Front Page Top

#3 > doesn't it come down to the inherent instability of fractional reserve banking, as Austrian economists claim?

Not really. Especially when you replace the semi-accountable fed with a bunch of foreign miners.

The problem comes from not enough competition and regulating too much credit (to hide the damage income and sales taxes do to comparative advantage).

Posted by Bright Pebbles 2011-09-14 17:17|| 2011-09-14 17:17|| Front Page Top

#4 doesn't it come down to the inherent instability of fractional reserve banking, as Austrian economists claim?

Its certainly part of the problem.

Although without fractional reserves there isn't much point in having banks (taking in deposits).

Posted by phil_b 2011-09-14 20:35|| 2011-09-14 20:35|| Front Page Top

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