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Thursday, 12 October 2017 12:00

Can a Modern Central Bank Still Be a “Banker’s Bank”?

Written by  Marcia Christoff-Kurapovna

Answer: No. And not for reasons of policy or politics, but of national character — that is, what remains of such.

For, once upon a time in the early history of modern banking, a common belief among all rational analysts of the system was an aversion to what was then referred to in those rose-tinted 19thcentury decades as “speculative political economy.

” At the time, central banks carefully managed their status as the symbol and paragon of national pride, responsible as that institution was for the maintenance of three basic principles of fiscal agency. First, that a central bank, above all, must honor its reputation as a ‘pillar of public credit’; secondly, that the central bank both worked with while remained wary of the State; third, that the central bank had to retain a superior position to private banks, and did so by disciplining itself to preside over high reserve ratios and the strict administration of credit.

Compare that assessment with that of James Grant, of Grant’s Interest Rate Observer, who stated in an excellent interview with a Swiss newspaper in August 2016: “Over the past 100 years, collective responsibility in banking has replaced individual responsibility. The government, with the introduction of deposit insurance, new regulations, and interventions, has superseded the old doctrine of the responsibility of the owners of a property.

Read more at InfoWars

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