The financial system is slipping into state control
YahooFinance/The Economist/5-18-2023
“In America, Britain and Europe, officials are debating if they should offer more generous protection for bank deposits. Such moves are just the latest evidence of the diminution of banks’ power and the increase in that of the state. Over the past few months, in areas from deposit insurance to emergency lending to regulation of asset quality, Leviathan has grown ever more dominant.”
USAGOLD note: Banks are becoming wards of the state, says The Economist. The publication puts special emphasis on the fact that the Fed will buy bank-held securities at par even though the market value has been heavily discounted. “The bigger the backstop,” it says, “the more reason government has to dictate what risks banks may take” – a notion antithetical to tenets of capitalism.