The big New York banks no longer perform the banking function of lending to consumers and businesses. Thanks to government policies that foster increased financial concentration, banking incentives have changed fundamentally. The big banks today are focused on higher risk-return speculation and on trading and fee-based income.
Banks don’t lend not because, as banks and their lobbyists claim, of new capital requirement rules, but because their ability to lend is foreclosed by the fact that the big banks pay out all or more than all of their net income in dividends and buy-backs of their own stocks in order to drive up executives’ bonuses. The extraordinary payouts of earnings leave the banks’ capital position too weak to support more lending.
Paul Craig Roberts, former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal, has held numerous university appointments. He is a frequent contributor to Global Research.
Dr. Roberts can be reached at http://paulcraigroberts.org
Disclaimer: The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible for any inaccurate or incorrect statement in this article. The Centre of Research on Globalization grants permission to cross-post Global Research articles on community internet sites as long the source and copyright are acknowledged together with a hyperlink to the original Global Research article. For publication of Global Research articles in print or other forms including commercial internet sites, contact: [email protected]
www.globalresearch.ca contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the
copyright owner.
