Posted on June 18th, 2012 at 9:15 by John Sinteur in category: Robber Barons, What were they thinking? -- Write a comment
from each according to his volatility, to each according to his greed
To be fair, one should add that the german Sparkassen system hasn’t much to do with ruthless investment banks. They are decentralized savings banks, often in ownership of the state, the local town or similiar. As of german law, their primary goal is not to make profits, but to provide monetary services like savings or deposit accounts the citizens, to give loans to local businesses etc. Profits go mainly into safety reserve funds or are donated to local charities. Another comparable banking system are credit unions. It would be absurd to compare a Sparkasse to the greedy sharks like Deutsche Bank or Goldman Sachs.
Interestingly, the USA also had a savings-and-loans banking system, which worked quite well while they were tightly regulated. At the start of the 80s, these banks were heavily deregulated. Consequently, only some years later, the devastating savings-and-loans-crisis occurred, which was ghastly similiar to the great financial crisis of 2007, also had its cause in highly risky real estate deals to pursue profits, countless banks needed heavy bailouts, and the crisis was among the reasons for the huge deficits the USA had end of the 80s.
@Steffen: In retrospect this shows how much the US & UK governments were under the influence of the financial sector – did no legislator ask, “What could possibly go wrong?” during the deregulation process?
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