This is a review of a book written over 50 years ago by a central banker.
Based on that introduction, even most finance geeks will probably think “boring!” or “irrelevant!”. Until you learn it has Nazis, hyperinflation and the Nuremberg trials in it. And those are not even the interesting parts. Continue reading “The Magic of Money”
Let’s say you want to read a book about money and banking. What options do you have?
As it turns out, quite a few. Here’s my classification of the literature into six broad themes. The discussion is limited to books that deal with banking and the monetary system. I don’t cover the popular genre of personal finance books that tell the reader how to invest or how to minimize taxes. The books mentioned in this post are illustrations of categories. They should not be interpreted as endorsements. Continue reading “Books on money and banking: a classification”
It seems there are two bitcoin camps: the true believers and the naysayers. Izabella Kaminska from FT Alphaville in particular has been explaining for years why cryptocurrencies are not the utopia some imagine them to be. In this post, I summarize my own reasons why I don’t think bitcoin is a credible threat to the banking industry.1Continue reading “My beef with bitcoin bulls”
Do you think banking is too hard for you? Are you convinced that all bankers are crooks? Would you like to follow the financial news, but you always get stuck on terms like derivatives, cryptocurrency or quantitative easing?
2007 seems ages ago. It was the final year of another era, the time before the Crisis. Whatever you prefer to call it – credit crisis, debt crisis, global financial crisis, banking crisis – the crisis has scarred the shareholders of banks. Even though ten years have passed, most bank stocks still have not recovered to their pre-crisis highs.
In an event that has been called the WannaCry ransomware attack, hackers encrypted data on computers all around the world. The victims – which included hospitals and car factories – had to pay ransom in Bitcoin to get their files back.
Computers without up to date operating systems were particularly vulnerable to the attack.
People who have never come into contact with the internal IT operations of a large company find this hard to understand. Why don’t companies just install the latest patches, like private persons do on their home computers?
However, there exists a much better description for banks. In Dutch, the formal description of banks is “geldscheppende financiële instellingen”, which literally means “money-creating financial institutions”:
As far as I can tell, Dutch is the only European language in which banks are described as active money creators1. All other languages use ‘monetary intermediation’.
Maybe everybody should take a cue from Dutch and start saying ‘money creating institutions’ from now on, so we don’t have this debate a hundred years from now 😛
I explain how banks create money in Bankers are people, too. After you’ve read my book, you’ll know more about banking than many PhD economists!