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mrbluze writes:
"An interesting blog post by Charles Hugh Smith on Why Banks Are Doomed: Technology and Risk.:
The funny thing about technology is that those threatened by fundamental improvements in technology attempt to harness it to save their industry from extinction. For example, overpriced colleges now charge thousands of dollars for nearly costless massively open online courses (MOOCs) because they retain a monopoly on accreditation (diplomas). Once students are accredited directly--an advancement enabled by technology--colleges' monopoly disappears and so does their raison d'etre.
The same is true of banks. Now that accounting and risk assessment are automated, and borrowers and owners of capital can exchange funds in transparent digital marketplaces, there is no need for banks. But according to banks, only they have the expertise to create riskless debt.
...
One last happy thought: technology cannot be put back in the bottle. The financial/banking sector wants to use technology to increase its middleman skim, but the technology that is already out of the bottle will dismantle the sector as a function of what technology enables: faster, better, cheaper, with greater transparency, fairness and the proper distribution of risk.
There may well be a place for credit unions and community banks in the spectrum of exchanges, but these localized, decentralized enterprises would be unable to amass dangerous concentrations of risk and political influence in a truly transparent and decentralized system of exchanges.
It's still early days, but can new electronic currencies such as Bitcoin become mainstream without the assent of governments?"
(Score: 0) by Anonymous Coward on Tuesday February 25 2014, @11:45PM
No, banks can work fine for society. It's the deregulation and changes in laws some years back that allowed the banks to do all that bad stuff. Backed up by support from the people at the top - given the verdicts in many cases were to let the culprits go free with the money still in their hands, I'd say it was intentional theft by the 1% from the 99%.
Who did the Federal Reserve really help when they loaned trillions of US dollars from thin air?
Go see how favored people in banks are treated when they launder money compare with what happens when others do it. No jail vs jail.
Go count how many people went to jail for this: https://en.wikipedia.org/wiki/MF_Global#October_20 11:_MF_Global_transfers_client_account_funds_to_it s_own_account [wikipedia.org]
( If I transferred someone else's money into my account without their permission, it's considered theft even if I give it back in full - I'd still get in big trouble, but these people go free).
As the Iceland example shows - you don't have to bail out the banks, bail out the depositors and let the banks die (and jail those who commit crimes). The finance bunch may scream about it, but once you recover and do well, they'd be back because they can make lots of money again (just like they did when times were good).