Societies having a problem with money lenders has been around for ever. Here is a painting which Rembrandt painted in 1635. It demonstrates Christ driving the money lenders from the Temple. It has always been one of my favourite parts of the bible.
Greedy bastards playing on people’s vulnerability have been around for ever. Often it is because as people struggle to feed their families, or managing their lives, with inadequate means to survive, and then they need assistance. We have always invented structures which capitalise on personal insecurity.
Here’s a story from Newsroom:
- ‘We’ll help you’ Monetary authorities, including the US Federal Reserve and the Reserve Bank of India, had stepped in to relieve stress on their fund markets after the escalating coronavirus crisis triggered outflows and sharp falls in asset prices.
- Moral hazard 101: The news is likely to increase the concerns of policymakers about the potential for instability in the funds industry that could trigger the next financial crisis. In April, the IMF warned that further outflows from vulnerable bond funds risked running down managers’ cash buffers, triggering renewed turbulence and clogging up credit markets.
Last week I covered the story of how the banks were stretching business owners over a barrel and demanding all sorts of security for loans on which the Government was taking 80% of the risk.
So, the Government drove the money lenders from our economic temple. The banks had cocked up with these loans to business. So, this week the Government changed to delivering support through the IRD. https://media.ird.govt.nz/articles/government-boosts-cashflow-support-for-small-businesses/.
This decision by the Government was a really good one and was, I hope, step one to starting the shift to using NZ institutions to rebuild our trading economy.
Maybe it’s time for us to upgrade the Rembrandt painting and make it more contemporary:
I hope this action caused the banks to sit back and think about how they are not trusted. I doubt that will happen. They will be rushing around to their mates weeping and gnashing their teeth, and the media, desperately searching for click bait, will print it.