you are viewing a single comment's thread.

view the rest of the comments →

[–]worm 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (1 child)

Probably for the same reason that the German 10Y bond sits at a negative yield, while the Argentinan 10Y bonds sit at something like 20-25% yields.

Commercial lending and retail lending are completely different markets. It's one thing to lend money to a wealthy and well-known corporation, and another thing entirely to lend to any old John Doe. Even without examining the entirely different sets of laws, rules, and expectations which lie behind each kind of lending, the difference in risk is immediately obvious on matters of size and reputation alone.

I'm not saying that central banking is necessarily a good idea, because I'm not convinced by central banking either. What I am sure of, however, is that a central bank wouldn't find it easy to open up a retail banking business, and I don't think it should even try.

Edited for capitalisation issues.

[–][deleted] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

big corporations needed getting bailed out, they're not always worthy of the loans, but have connections