Oh dear Willy

Now there is official acknowledgment that a country burdened by bank assets five times its GDP and chronically poor productivity is being dragged into the deepest and longest economic setback in modern times

So that idea of yours, that banks should take on more assets by lending more to companies: if banks having too many assets is a bad idea then that rather blows up the plan that you\’ve been hawking to us these decades, doesn\’t it?

2 thoughts on “Oh dear Willy”

  1. Surely it this view depends on the risk as much as the value? Whether the government lends should be based on the net economic return. If lending a pound boosts the economy to such an extent that the tax return is boosted by more than a pound then it is successful, even if the loan is later written off. If lending further jeopardizes the economic risks of a sovereign debt crisis, even if you are later to get the money back with interest, I would suggest it is not.
    If lending is a huge gamble, then prudence dictates discounting much heavily likely benefits than likely risks

  2. So Much For Subtlety

    But this time it is different! Because that lending will be done at the government of the day’s behest, under the direction and with an explicit guarantee if need be. I mean, what could go wrong?

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