The origins and consequences of bankers' power

Norbert Haering

International Journal of Pluralism and Economics Education, 2010, vol. 1, issue 3, 242-259

Abstract: This paper explores the origins of the extraordinary political power of the financial industry. It results from a centuries-old symbiotic relationship between private financiers and governments. Bankers obtained the right to issue money and the backing of central banks a lender of last resort, to bail them out as needed. If central banks would assume a larger share of the overall money creation rather than private banks, this would attenuate credit driven boom-bust cycles and provide governments with non-distortionary seignorage-income. Achieving such fundamental reforms will only be possible if the political clout of the banking industry is broken by judicial intervention or a voter revolt.

Keywords: banks; financial sector; banker power; bankers; political power; private financiers; governments. (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijplur:v:1:y:2010:i:3:p:242-259

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