Wednesday, September 19, 2007

Panic on the Streets of Newcastle

Banking systems. The subject involves the constant manipulation of hard numbers, yet the very existence of reserve ratio regulations acknowledges the influence of unpredictable consumers. This does intrigue me. It's all about those fuzzy boundaries between rational thinking and mass hysteria. Statistics and game theory.

I did a lot of this at college. In fact two of my tutors went on to become economics advisors to the government of the day, one of them advised John Major's government about privatisation and a second was also involved with the regulation of natural monopolies in the early days of Gordon Brown's time as Chancellor.

So I do know the principles about why the government does not guarantee all bank deposits. But I still think they are protecting shareholders and directors rather than investors. And that is wrong.

1 comment:

Faisal said...

Are you claiming you listened to your teachers? I find that a bit hard to believe!!! :)