Ed Harrison – talking about banks & conflicts of interest

An excellent analysis of the issue with banks being bailed out, banks get into trouble and they are rescued (bailed out) or they default and creditors take a hit. However, often times the sovereign gets into trouble as well. Does the Sovereign then privatize assets or default themselves? Assets such as the banks fall into the hands of foreigners at that point – as we have already seen with Bank of Ireland.

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Loan refusal statistics: what do they mean?

There are two sets of statistics floating around; on one hand you have the banks who claim that they are lending and also that the demand for credit simply isn’t there – a belief further expounded by John Trethowan. Then on the other hand you have the likes of PIBA who counter claim that 80% of applications are being refused.

So it is important to break down the vital components. First of all, the debate often centres around Small Medium Enterprise (SME) lending; even if demand for that type of credit isn’t there it doesn’t automatically translate into a reduced demand for mortgages. The point being that we can’t compare SME loans/business loan demand to that for mortgage credit.

Secondly is ‘what constitutes a refusal’, and this is where common sense diverges. Even the bank accept that if you seek €200,000 and are only offered €100,000 that it is a loan not fit for purpose, this even goes …

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European Historical Economics Society 2011

There were some excellent presentations at the EHES this year, where some of the worlds leading historians, economists and economic historians gathered to share their thoughts.

The first video is excellent, Bob Allen of Oxford talks about why the Industrial Revolution was (in his opinion) a result of high wages and lower energy costs – which lead to a preference for technical innovation. Deirdre McCloskey of Chicago University offers excellent criticism in the questions at the end. Apologies for the sound quality, Bob had a tendency to move away from the mic and I wasn’t using a remote one.

In the next video Branko Milanovic talks about income distributions in the Mediterranean countries 2,000 years ago, and using very sparse data creates a compelling view of income from that time, what I took from this one was that income inequality has always been alive and well, a Roman Senator made about 500 times the wages of a regular worker (watch the video!).

Then there is a Roundtable discussion featuring the ‘who’s who’ of economic history

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Feasta & Smart Taxes Conference: September 22nd & 23rd

Feasta and the Smart Taxes Network are holding a conference on the 22nd & 23rd of September in the Mont Clare Hotel in Dublin 2. The people who work in Feasta are ideologically diverse (that is one of the things I really like about them!) and a bright bunch, the delivery, debate and data are all sure to be excellent. Hopefully we’ll see some of our readers there! (details below)

It is sure to be a treat, there are great speakers from around the world, to name a few:

Marshall Auerback (Roosevelt Institute Fellow & global portfolio strategist for Madison Street Partners, LLC) Prof. Charles Goodhart (member of the Financial Markets Group at the London School of Economics & former monetary adviser to the Bank of England) Bernard Lietaer (author of ‘The Future of Money’ & international expert in currency systems)

And of course we have our home-side team of heavyweights too! Fergal O’Brien (Chief Economist – IBEC), Richard Douthwaite (Sustainability Economist and Author), Dan …

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What will come of it all? Eurobonds? Probably not…

If you look at the dynamic of the crisis to date you see the following flow (broadly but not exactly)

1. Sub-prime mortgages in the USA started to go under 2. Interbank lending froze as banks liabilities were unknown & collateral was of unknown quality 3. Interbank rates shot up 4. The crisis was not contained, culminating in the fall of Lehman which triggered a series of world events the most substantial aspect of which was a loss in confidence. 5. Markets fell rates were dropped to record lows in the EU, USA and Britain. 6. Recovery began with several bailouts in the majority of nations affected.

and then….

7. This is critical – bank and private debt effectively became public debt, in Ireland’s example this was via our banks, in other countries it was in the same manner or via quantitative easing. Across Europe the ECB was a key facilitator of liquidity.

The debt has now, in many countries become a public debt issue, in Europe specifically it is a Sovereign debt issue, the like of which the US …

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