a look back at the 2008 financial crisis........................From Late 2008 and Greg Pytel's Blog
''The deposit creation process is at the heart of the banking system
servicing the public and stimulating economic growth. The modern banking
instruments of securitisation, hedging, leveraging, derivatives and so
on turned this process on its head. They enabled banks to lend more out
than they took in deposits. According to Morgan Stanley Research, in
2007 UK banks loan-deposit ratio was 137%. In other words the banks were
lending out on average £137.00 for every £100 paid in as a deposit.''
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