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SSIA as way to combat virus’ economic impact

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Comments

  • #52
    Dots1982
    Closed Accounts Posts: 3,957 ✭✭✭Dots1982


    Geuze wrote: »
    Again, money in deposit account is not "sleeping".

    Say I have 20k on deposit.

    That is loaned to people and firms all over Ireland.

    It is not idle.

    Banks lend out savings to borrowers, who spend and invest.

    My savings are used to finance new tractors, milking machines, new Aldi warehouses, new Vodafone mobile masts, new printers, new machines up and down the country.

    That is the whole point of banks.

    They are matchmakers - they match savings and loans.

    They do this every day.

    Broadly true, Although The point of banks from the banks point of view is to generate profit from the least amount of risk.

    So they won’t be providing any money to any businesses that are struggling during or after the crisis. At least not to the extent a government whose main interest is the strength of the economy would do.

    My idea is full of flaws. The best idea at the moment is going to Cause large inflation. We’ll see what happens.


  • #53
    Ubbquittious
    Registered Users, Registered Users 2 Posts: 6,281 ✭✭✭Ubbquittious


    Most money lent out by banks is money they created through the fractional reserve system. Deposits are only a sideshow in the modern banking world.


  • #54
    kravmaga
    Registered Users, Registered Users 2 Posts: 1,980 ✭✭✭kravmaga


    Why cant the Government use the €13 or €15 Billion Apple money lying untouched in an Escrow account, dont get this.

    Finance Minister Paschal Donohue said they will need to borrow €3 to 4 billion to get us through the current economic crisis??? we dont need to borrow, just use the Apple back tax money to get us through this mess.


    https://www.irishtimes.com/business/economy/apple-s-15bn-back-tax-could-fund-ireland-s-cash-crunch-1.4209152


  • #55
    Geuze
    Registered Users, Registered Users 2 Posts: 13,932 ✭✭✭✭Geuze


    Simple answer: that would be theft.


  • #56
    Geuze
    Registered Users, Registered Users 2 Posts: 13,932 ✭✭✭✭Geuze


    Ubbquittious wrote: »
    Most money lent out by banks is money they created through the fractional reserve system. Deposits are only a sideshow in the modern banking world.

    Let's check the AIB balance sheet:

    https://aib.ie/content/dam/aib/investorrelations/docs/resultscentre/resultspresentation/aib-annual-financial-results-2019-presentation.pdf

    Deposits = 71.8bn

    Loans = 62.1bn

    Their deposits exceed their loans, as is the case across the Irish banking system.


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