This is the second part of our article dealing with the argument that bank lending must lead to escalating debt because banks don't create the money needed to pay the interest on the debt. Part 1 explained how the wrong conclusions have been drawn from the oft-repeated ‘banker on a desert island’ analogy. We showed that it is mathematically (and therefore logically) possible for both the principal and interest of a loan to be repaid.
The Bank of England will announce its latest interest rate decision later today. The monetary policy committee, including departing Deputy Governor Charlotte Hogg, is expected vote to keep rates just above zero.
What an exciting few weeks for the Positive Money campaign! Rounding off this morning with this full-page splash in the local newspaper of the Chair of the influential Treasury Select Committee of MPs. Here’s our crowd-funded advert in the Chichester Observer last week:
With this week’s budget, the Chancellor doubled down on a failed economic model. The government will continue cutting spending into the next parliament, and earlier this week, it was revealed that the Treasury has asked most departments to find an extra 6% of savings.
An interesting paper by Ulrich Volz on the role of central banks in enhancing green finance was published recently, originally on the UNEP website.