Skip to content →

A serious question

Capitalism depends on lending and borrowing, and hence on banks. In that sense banks are a utility, like Water Works or Electric Company.

Utilities have to be protected from collapse.

Banks borrow from depositors and have to earn a spread by lending or investing.

How do you set a sensible limit, individually or as a group, on the activities borrowers can lend to or invest in, so as to avoid future economy-shattering disasters?

I don’t think the answer should involve advanced statistics or mathematics.

Published in other