It admits it owes more than it owns, and if it were a company it’d be bankrupt, but insists this doesn’t matter. I’m sceptical. In Why the RBA should be abolished – and what could replace it (10 April) I demonstrated that, for more than a century, central banks haven’t … [Read more...] about Does the RBA’s “negative equity” matter?
Archives for April 2023
Central banks’ inflation destroys currencies and worsens the boom-bust cycle. Milton Friedman reckoned that computers would do far better. In What Causes – and How to Prevent – Bank Crises (27 March), I showed that there’s a straightforward way – which entails no change of … [Read more...] about Why the RBA Should Be Abolished – and What Could Replace It
Duration mismatch regularly causes some banks to fail. Matching the duration of short-term assets and liabilities will eliminate failures. In my previous wire (The Risk of Higher Rates the RBA’s Overlooking, 21 March), I noted that the failures of the crypto-friendly … [Read more...] about What Causes – and How to Prevent – Bank Crises