2012年2月12日日曜日

3-6 The fistful of dollars



Buttonwood
Attacking your creditors is an intriguing strategy

“war on finance”=“war on terror”      
“vulture capitalists”=”terrorists”
similar uncertainty about how to define victory.

Discussion topics:
  1.  Why do the people especially politicians have complaints on finance?
  2. Where is the goal? What is the victory? Is it a win-win game?
  3.  Also I would like to talk about using dormant bank accounts(休眠口座)

Summary:
Three main beefs(不平不満) that politicians have with the financial sector
1.       Bankers earn too much.
2.       Banks take reckless risks and then need rescuing by governments.
3.       Investors in financial markets have undue influence over an economy.

1. Redistributive taxation

People do not worry too much about footballers’ high pay. Why the people attack bankers is because of the extent to which they are subsidised by explicit and implicit taxpayer support.

2. Higher capital ratios

The problem of banks being “too big to fail” is being addressed by higher capital ratios. Higher capital ratios should mean lower returns on equity. So the bank bosses are harder to gain high payments because the pay of bank bosses correlated well with returns on equity, but not with returns on assets.

3. Politics and the markets

The political message seems to be:
“We hate private-sector creditors. We will penalise you by defaulting on your debts but not on debts to official creditors. We will endeavour to stop you protecting yourselves against our actions by making it difficult to collect on insurance in the credit-default-swaps market. Now, can we please borrow some money at a very cheap rate?”
What happens to countries like Greece which lose access to private- sector finance? 

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