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Better vehicles, certainly. And better production methods. Just as we expect oil companies to behave when drilling for oil (in the Gulf of Mexico, in Nigeria), we expect banks to behave when trading risk and duration (sub-prime investments, Icelandic deposit interest rates). We expect oil companies to help build more efficient engines through closer integration of their product development with the r&d dept of motor engineers, not to just promote the lowest MPG V12s. We expect banks to develop better use of risk differences, not to just look for maximisation of risk at the expense of regulating governments. Maybe it is not the banking system we want to get rid off, maybe it is the execution that is one step behind the strategic execution and transparency of the oil companies (which, by the way, is behind many other industries simply because of its protected nature). Maybe we expect the banks to improve their oligopoly-protected management. Ever seen a picture of excessive risk? Theirs being a non-physical product, banks' mismanagement of their processes is less visible on a daily basis; it doesn't make the headlines at an early stage, as it does in the oil industry. If I understood it right, Venessa's rant the other day was not so much anti-banking system as it was anti-banks' execution. A new currency in my view is still a currency. Wider-defined wealth is still wealth. There will always be the need for institutions that assume variations in risk and duration, whether expressed in the one currency or the other. New currencies may change the payment infrastructure, they will not change the nature of the core balance sheet of commercial banks. Demanding transparency of production methods (Triodos!) could be a great consumer angle.
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Nov 10, 2010