daaan's review
2.0
It's a bit of a mixed bag. The history is great, some new info and learnings for me. As so often is the case though, the "what next" is sorely lacking.
Key issues:
The creation of investment accounts will increase mortgage rates. This maintains the wealth transfer from rich to poor, particularly given the risk premium attached to non tradeable instruments.
Does not address the issues associated with Securitisation and more importantly global capital flows.
Creates additional solvency concentration risks at the BoE, and places a huge burden on them to know how much money the economy needs. Given all the money they would now issue would be hot money, this has the potential for huge inflationary swings.
This fails to address shadow banking.
It's a nice try, but a bit luddite. Mervyn King's End of Alchemy proposes a far more effective system in the pawnbroker for all seasons model.
Key issues:
The creation of investment accounts will increase mortgage rates. This maintains the wealth transfer from rich to poor, particularly given the risk premium attached to non tradeable instruments.
Does not address the issues associated with Securitisation and more importantly global capital flows.
Creates additional solvency concentration risks at the BoE, and places a huge burden on them to know how much money the economy needs. Given all the money they would now issue would be hot money, this has the potential for huge inflationary swings.
This fails to address shadow banking.
It's a nice try, but a bit luddite. Mervyn King's End of Alchemy proposes a far more effective system in the pawnbroker for all seasons model.
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