« Things worth reading: 24th November 2011 | Main | Things worth reading: 25th November 2011 »

November 24, 2011


Feed You can follow this conversation by subscribing to the comment feed for this post.

Robin Brownsell

I have just read this book and could not agree with you more :

"Masters of Nothing: The Crash and how it will happen again unless we understand human nature" by Nadhim Zahawi and Matthew Hancock

Standing by for FSA report on 12th December!


Good post,thank you share it,i like it very much

Iang (What Banking is.)

Good post!

Start with your definition of banking:

> The nature of banking is to borrow your money, in the form of deposits that they pay you interest against to look after, and then lend that money at a profit to others in the expectation that others will pay it back at some point.

For this activity, banks are issued a charter. That is banking, for that you need a charter.

The reason you need a charter is because of the extraordinary risk taken between demand deposits and term loans. The economy can screw you -- no other business faces this exposure. Banking _is_ risk, and any technophiliac approach to risk is doomed to failure.

However, if the bank then uses its capital (its franchise!) to invest in *markets* for some quick profits ... it has broken its charter.

Understand the nature of the banking charter. From this, all else follows, and the GFC marks I and II are explainable.

mark piper

Any risk practice that is based on historical data is fundamentally floored. Discuss....

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)

Twitter FSClub

    follow me on Twitter

    Your email address:

    Powered by FeedBlitz

    Search blog

    Amazon Digital Bank

    Financial Brand Editor's Choice

    Alex: The Finanser BlogAlex at the Financial Services Club
    Gaping Void: The Finanser BlogGaping Void's Hugh MacLeod worked with the Finanser
    Wordle: The Finanser Blog

    The Financial Brand


    Payments News - from Glenbrook Partners

    Payments RSS

    Tomorrow's Transactions blog