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Delve into the complexities of money, banking, and finance, questioning the role of banks, debt, and interest in economic justice. Explore alternative banking models and ethical considerations in financial systems. Reflect on moral implications of debt and interest, with insights on economic balance in contracts.
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Library Communiveristy Open Learning Course The Economy and Us: week 3 Overview Money, banking … and finance The elephants in the room This is a complex set of issues and some aspects can only be dealt with in bare outline Some suggestions for follow-up are available
Some issues for this session • Money: • What is ‘money’? • Where does it come from? • What are the consequences of this? • Can it/should it be reformed? • Banking: • What do banks do? • Do we need banks? • Could there be a ‘good’ bank? • Debt and interest: these issues raise moral questions – I can only suggest some ways of thinking about them.
How does a bank account work? • When we ‘put money’ into a bank account, does the bank: • Put it into a box marked with our name (so we can get it later)? • Simply note that we have this amount of money to draw on?
What else do banks do – some answers! • Provide means to make payments • Provide overdrafts, loans and mortgages • Provide savings services
What else do banks do? Could we manage without banks?
Some questions … • What is ‘money’? • What (in banking terms) is ‘liquidity’? [These questions are related]
Some more questions • What are a bank’s (financial) assets? • What are its liabilities? • Does a bank ‘lend’ the money which its depositors have placed with it? • Should banks charge interest on a loan?
Here’s Ben Dyson of the (British) Positive Money CampaignThis is based on UK experience, but the Euro system is (with some changes) the same https://www.youtube.com/watch?v=nc6kKOGp560
OK – let’s reflect on this • Can we put this in (other) simple terms? • What are the consequences? • Should it be reformed?
Could there be (is there?) such a thing as a ‘good’ bank? • What principles would guide its work?
Here’s an example of a ‘good’ bankDo you agree? The videos which follows describes the work of the German GLS bank http://www.youtube.com/watch?v=3kElRGPg7BA https://www.youtube.com/watch?v=1dhb7KzUieI
There are other examples • Triodos Bank • Operations in Netherlands, Belgium, Spain and the UK • The ASN Bank (‘General Savings Bank of the Netherlands) • ‘For the world of tomorrow’ • Will only finance work in the area of renewable energy, ‘good work’, recycling, …
The Global Alliance for Banking on Values (GABV) Take a look at the website: http://www.gabv.org/
Debt and interest: some moral issues • Are we always required to repay debts? • Is ‘interest’ on loans inevitable? • If so … where does the ‘money’ to pay the interest come from? • What are its other consequences? I am not offering answers to these questions – only pointing out some issues of economic justice
Debt – some things on which to reflect • A contract – whether for trade or finance needs to have a reasonable balance, with neither side having undue power over the other. • There are assumptions: • that both sides have entered into the contract with good intentions; • that both sides understand and accept the risk and uncertainty. • that some measure of economic (and political) stability will remain.