In just 4 minutes Martin Wolf, Chief Economics Commentator of the Financial Times, clearly states point by point what is the problem with our current financial system and how we can fix it:
“We have a really perverse situation, where we supposedly have a market economy, but we don’t have market-driven finance, particularly in banking.
If we want this to be different, we have to create a different system. And the starting point is to recognise that the reason we can’t leave banking to be an ordinary business is that it is responsible, directly, for creating nearly all the money in our economy as a result of its lending activities.
We’ve got to think about more radical alternatives. And the right alternative is one in which government again takes control of the creation of money as a means of payment and a store of value, which is absolutely certain and solid. And that allows the rest of the financial system to become more genuinely market-led and market-driven with the risks internalised within it.”