I do not know banking that well. It seems to me that when you borrow money, you put your life into the hands of the lender. Not your whole life, but a good portion of it. The lender gets to "guide" you (by a set of rules) into behaving in ways that benefit them. These rules are designed in a way that makes you want (or need) to follow those rules. To be able to borrow, or once you have borrowed money, you have to follow these rules or risk your "lifestyle" (or business).
When I look at the banking industry (sic), I see that the behavior of companies, as well as individuals, is controlled through that set of rules. The rules force the borrower into behavior that is beneficial to the lender. Keeping a good credit rating (to keep interest rates down). Working to keep your cash flow as high as possible (to pay your current debts). [Whether you are increasing your income, or cutting expenses (or cutting your workforce).]
The rules guide you into behavior that result in the loans made getting
repaid, and more loans being arranged. It keeps the money (and
profits), flowing. These behaviors are very beneficial to the lender. They afford the lender an incontrovertible influence over the borrower (whoever they may be). The rules keep a steady cash flow coming into the lending institution.
I notice, since the "World Wide Recession", that access to money has gotten extremely restricted. "Money is tight", as they say. I find this odd, because the worldwide money supply has not gotten smaller. The money supply has grown, if anything, in the years since 2008. It makes me wonder how all that money is really getting used.
I find the "news" might be a source of information. The global news, (BBC, RT, Al Jazeera, France24), have been reporting, in depth, on the world economy. Greece, Portugal, Spain, even France, have been having monetary problems. Most of these countries have been required to secure "bail-outs", to keep their national economies "afloat". Where are they ultimately getting their funding ? The countries are ultimately getting their financing from the banks.
"Bailing out" national economies is big business. It also requires huge amounts of funds. Enough funds are required to severely limit the amount of monies available to lend for "normal" business (corporate and individual lending). [Hence the highly restrictive lending environment that currently exists.] It also affords the lending institutions a whole new level of control over the world. If lending institutions can now guide countries, the way they have been guiding corporations and individuals, the world now becomes a very friendly place for these institutions. A world where the most important thing in that world becomes the health and well being of the lending institutions.
These are the musings of an outsider. Someone who knows very little about "high finance". There are many places where I might be getting something wrong, because of a general lack of understanding. The implications, however, are staggering. It also makes me wonder, possibly in a fit of paranoia, why the market crash ever even happened (since the crash did setup the current need for bail-outs).
Think about it.
