Deutsche Bank är ju i realiteten en hedgefond”, säger Arne Fredly, som föredrar norska, men även svenska banker

Han anser att amerikanska och europeiska banker lider av extremt dålig ledning, ”galna incitament, sjuka chefslöner och eländig reglering”.

Carl Thulin DI 24 mars 2023

The crisis is caused by the reality that “banks” aren’t really banks in the way they used to be

(taking deposits at 3%, lending at 6%, and hitting the golf course by 3 p.m.)

Antigrowth policies on Main Street mean Wall Street can’t earn money the old-fashioned way.

Commercial and industrial lending by all banks as a proportion of their total assets has drifted downward. Banks instead have turned to other means of earning a living. 

The past 40 years has seen an explosion in lending related to real estate

The last time business loans exceeded securities holdings as a proportion of bank balance sheets was the early 1990s

Rampant real-estate lending in particular is both symptom and cause of a breakdown in productivity growth. It signals the economy is pouring ever greater resources into one of its least productive corners.

If you make it harder for them to earn a buck the old-fashioned way they’ll have to try to earn it in a novel way.

This helps explain why several decades of monetary, fiscal and regulatory policies that have tended to suppress productivity growth on Main Street also have made Wall Street vulnerable to more and riskier panics far in excess of the normal business cycles we used to have.

Joseph C. Sternberg WSJ 23 March 2023

Joseph C. Sternberg is a member of the Journal's editorial board and the Political Economics columnist.


The Hazards of Asset Allocation in a Late-stage Major Bubble

Jeremy Grantham 5 January 2021

Citigroup chairman Chuck Prince

“So long as the music is playing, you’ve got to keep dancing. We’re still dancing.”

The Savings and Loans Bailout

Financial crises get triggered about every 10 years

During the late 1980s, nearly a third of the nation’s savings and loan associations failed, ending with a taxpayer bailout — in 2021 terms — of about $265 billion.

Over the past 20 years major financial disruptions have taken place roughly every three years

Financial crises differ in detail but, just as there are plot cycles common to literary tragedies, they follow a common arc.

Lawrence Summers, Financial Times August 27 2007


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