Making the financial system safe - a bad goal?

[Pope Joan]

The Banks exist to keep track of the Beans.
If they want to make a few Beans themselves, that is fine and very well,
but if they let making Beans take precedence over tracking the Beans,

then surely the time has come to inflict butt-hurt so that they may learn to stay more tightly focussed in the future.

Right.

We customers, depositors, are the reason those banks are allowed to exist. None (or few) of us want to see them playing fast and loose speculating with our hard earned cash.

It didn't use to be that way; surely we can just go back to those good old days of the mid 20th century? Restore a little sanity?

[Ostroeuropa]

The Banks exist to keep track of the Beans.
If they want to make a few Beans themselves, that is fine and very well,
but if they let making Beans take precedence over tracking the Beans,

then surely the time has come to inflict butt-hurt so that they may learn to stay more tightly focussed in the future.

Right.

We customers, depositors, are the reason those banks are allowed to exist. None (or few) of us want to see them playing fast and loose speculating with our hard earned cash.

It didn't use to be that way; surely we can just go back to those good old days of the mid 20th century? Restore a little sanity?

I seem to remember 1/3rd of the planet being run by communists at that time, and another third by fascists.
Just to be a pedant.

[Rubiconic Crossings V2 rev 1f]

Ethics can't cover everything, Rubi!
The thing to do when approaching Problems is to remove all ethics and only re-insert them when we are picking between Solutions. It saves so many problems!

...
Norsklow's razor
now joins Hanlon and Occam

"Shave away the ethics."

Dammit!

viewtopic.php?p=11512464#p11512464

I never pick up on these things!

[Renegade Island]

It's the same thing. How are these things valued/decided?

I understand economics perfectly, it's a system designed to manage the resources of a community/country/planet.

We have decided that bits of paper with a signature are valuable as a medium of exchange.
We don't IMAGINE they are, because they ACTUALLY ARE since we decided it.
If we merely IMAGINED it it wouldn't be the case. You can imagine that a strand of hair is valueable. But it doesn't make it so.
However if we all decide that it is, then it is.

No. We can all decide that gravity doesn't exist, that doesn't mean that it's true.

Consensus does not define reality.

[Norsklow]

You don't imagine value. You decide it.
It has value because it is valued. So your edit just betrays your basic misunderstanding of economics.

It's the same thing. How are these things valued/decided?

I understand economics perfectly, it's a system designed to manage the resources of a community/country/planet.

Good grief. Please stop reading WIKI for a while. You are becoming imbued with extremely sloppy thinking.

[Ostroeuropa]

We have decided that bits of paper with a signature are valuable as a medium of exchange.
We don't IMAGINE they are, because they ACTUALLY ARE since we decided it.
If we merely IMAGINED it it wouldn't be the case. You can imagine that a strand of hair is valueable. But it doesn't make it so.
However if we all decide that it is, then it is.

No. We can all decide that gravity doesn't exist, that doesn't mean that it's true.

Consensus does not define reality.

When it comes to value it does. We're not talking about something that'd be true whether or not we existed.

Without someone to value something, it has no value.

[Pope Joan]

Right.

We customers, depositors, are the reason those banks are allowed to exist. None (or few) of us want to see them playing fast and loose speculating with our hard earned cash.

It didn't use to be that way; surely we can just go back to those good old days of the mid 20th century? Restore a little sanity?

I seem to remember 1/3rd of the planet being run by communists at that time, and another third by fascists.
Just to be a pedant.

So by comparison the rest of us were that much better! See how neatly that works out?

[Norsklow]

Ethics can't cover everything, Rubi!
The thing to do when approaching Problems is to remove all ethics and only re-insert them when we are picking between Solutions. It saves so many problems!

In terms of mapping out solutions and looking to cover eventualities...I'd agree. One should look at all possibilities and then remove the chaff. However ethics must be a part of that selection process...a basic criteria if you will...

I have this unfortunate habit of leaping to conclusions without going through all the steps because there are givens and it takes time to go through that...getting to the root cause quickly is basically what I do and have done all my working life (albeit in a specific and narrow field). So I expect people to be following me down that same route which is obviously preposterous.

Of course to add a bit of hypocrisy I usually do mention in my RCA reports that measuring twice and cutting once would have prevented or lessened the impact of a incident or problem.

NHS?

[Norsklow]

We have decided that bits of paper with a signature are valuable as a medium of exchange.
We don't IMAGINE they are, because they ACTUALLY ARE since we decided it.
If we merely IMAGINED it it wouldn't be the case. You can imagine that a strand of hair is valueable. But it doesn't make it so.
However if we all decide that it is, then it is.

No. We can all decide that gravity doesn't exist, that doesn't mean that it's true.

Consensus does not define reality.

So what is the value of a pot of gold?
(I'm going to drag you along to meet Robinson Crusoe and the Qalif of Bagdad )

[Rubiconic Crossings V2 rev 1f]

In terms of mapping out solutions and looking to cover eventualities...I'd agree. One should look at all possibilities and then remove the chaff. However ethics must be a part of that selection process...a basic criteria if you will...

I have this unfortunate habit of leaping to conclusions without going through all the steps because there are givens and it takes time to go through that...getting to the root cause quickly is basically what I do and have done all my working life (albeit in a specific and narrow field). So I expect people to be following me down that same route which is obviously preposterous.

Of course to add a bit of hypocrisy I usually do mention in my RCA reports that measuring twice and cutting once would have prevented or lessened the impact of a incident or problem.

NHS?

You mean work? No...not NHS...I try to avoid gov work as much as possible. They have this silly idea that one needs to have security clearance...

No...I do service delivery stuff around managed services/cloud/hosting...

[Renegade Island]

No. We can all decide that gravity doesn't exist, that doesn't mean that it's true.

Consensus does not define reality.

When it comes to value it does. We're not talking about something that'd be true whether or not we existed.

Without someone to value something, it has no value.

Consensus in this case is probably the wrong idea, because we aren't given a choice, it is imposed on us from birth.

I suppose I asked the wrong question. It's really about "who" decides things have value initially, and whether or not everyone else has a choice consenting with that value.

Because in todays world, only "government authorised" money has value because the government says so, and if you don't like that and create your own currency and start trading it with someone else, the government may try and lock you in a steel cage.

[Chestaan]

The problem isn't that the banks took risk, that's what they're supposed to do. The problem is that they invested in projects, such as sub-prime mortgages that were never going to be paid back.

Here in Ireland the main problem was that banks were too exposed to the property sector. So if it was made mandatory for banks to structure their assets and liabilities in a sane way (such as 20% max to construction, 15% to industry etc) then we wouldn't have this problem.

Still, it's probably too late now.

[Ostroeuropa]

When it comes to value it does. We're not talking about something that'd be true whether or not we existed.

Without someone to value something, it has no value.

Consensus in this case is probably the wrong idea, because we aren't given a choice, it is imposed on us from birth.

I suppose I asked the wrong question. It's really about "who" decides things have value initially, and whether or not everyone else has a choice consenting with that value.

Because in todays world, only "government authorised" money has value because the government says so, and if you don't like that and create your own currency and start trading it with someone else, the government may try and lock you in a steel cage.

The reason they do that is to prevent employers doing crazy shit like paying employee's in coupons for their product. Or worse, credit in the company store.

[Norsklow]

NHS?

You mean work? No...not NHS...I try to avoid gov work as much as possible. They have this silly idea that one needs to have security clearance...

No...I do service delivery stuff around managed services/cloud/hosting...

*starts muttering about the pernicious influence of the liberal elite* One of THEM. All THEIR fault. Hurr durr.

[Norsklow]

When it comes to value it does. We're not talking about something that'd be true whether or not we existed.

Without someone to value something, it has no value.

Consensus in this case is probably the wrong idea, because we aren't given a choice, it is imposed on us from birth.

I suppose I asked the wrong question. It's really about "who" decides things have value initially, and whether or not everyone else has a choice consenting with that value.

Because in todays world, only "government authorised" money has value because the government says so, and if you don't like that and create your own currency and start trading it with someone else, the government may try and lock you in a steel cage.

*proudly waves a 5 pound note from the BoS*

[Ostroeuropa]

Consensus in this case is probably the wrong idea, because we aren't given a choice, it is imposed on us from birth.

I suppose I asked the wrong question. It's really about "who" decides things have value initially, and whether or not everyone else has a choice consenting with that value.

Because in todays world, only "government authorised" money has value because the government says so, and if you don't like that and create your own currency and start trading it with someone else, the government may try and lock you in a steel cage.

*proudly waves a 5 pound note from the BoS*

Who was it who said that it's the only time you'll ever hear someone exclaim
"I think you'll find that's legal tender."

[Renegade Island]

It's the same thing. How are these things valued/decided?

I understand economics perfectly, it's a system designed to manage the resources of a community/country/planet.

Good grief. Please stop reading WIKI for a while. You are becoming imbued with extremely sloppy thinking.

Please specify rather than resorting to general attacks. I'm not here to dogmatically defend any position that I take. I will accept and process new information, if it's demonstrably true.

[Norsklow]

*proudly waves a 5 pound note from the BoS*

Who was it who said that it's the only time you'll ever hear someone exclaim
"I think you'll find that's legal tender."

ME! It doth not take a Federal Reserve Board to print money. A Decree suffices.

[Rubiconic Crossings V2 rev 1f]

You mean work? No...not NHS...I try to avoid gov work as much as possible. They have this silly idea that one needs to have security clearance...

No...I do service delivery stuff around managed services/cloud/hosting...

*starts muttering about the pernicious influence of the liberal elite* One of THEM. All THEIR fault. Hurr durr.

nah...its coz I'd fail the vetting...I've been working abroad a fair bit...and probably my MI5 file would cause palpitations although I've been a good boy these last 25 years...

Liberal...perhaps but not really...I tend to steer my own course

[Norsklow]

Good grief. Please stop reading WIKI for a while. You are becoming imbued with extremely sloppy thinking.

Please specify rather than resorting to general attacks. I'm not here to dogmatically defend any position that I take. I will accept and process new information, if it's demonstrably true.

Economics describes economic processes. Descriptive. Not prescriptive.
It is not designed to manage something.

[Hydesland]

This is why (common equity) capital requirements make a lot more sense, defining what banking activities are and are not legitimate I agree is an almost bottomless pit, capital requirements are a lot more simple. A study from the Bank of England found that holding capital at just under 20% of risk weighted assets is optimal, using very generous assumptions, and that is a lot more than the current requirements. It is also easy to adjust without having to introduce a new set of complex regulations each time, and can be as light or as radical as you want.

[The United Colonies of Earth]

I'd just try to prevent them from using the common people's own financial assets (mortgages, etc.) as betting pieces in their confusing game of money, which is as confusing as the OP is to me. If they want to trade assets for money and stability, let it be their own, so that THEY fall instead of us, and rise on their own merits.
Go capitalism!

[Chestaan]

Please specify rather than resorting to general attacks. I'm not here to dogmatically defend any position that I take. I will accept and process new information, if it's demonstrably true.

Economics describes economic processes. Descriptive. Not prescriptive.
It is not designed to manage something.

Technically not true. There are two forms of economics, positive economics which tells how things are, and normative economics which state how things ought to be.

[Norsklow]

Economics describes economic processes. Descriptive. Not prescriptive.
It is not designed to manage something.

Technically not true. There are two forms of economics, positive economics which tells how things are, and normative economics which state how things ought to be.

Which thinking has led us into the mess.

[Chestaan]

Technically not true. There are two forms of economics, positive economics which tells how things are, and normative economics which state how things ought to be.

Which thinking has led us into the mess.

Or maybe, we just listened to the wrong economists and ignored the ones who actually predicted the crisis.