Comments by "Aden Wellsmith" (@adenwellsmith6908) on "Interest rates should be as low as possible" video.

Proportion to their capital. It's the capital that controls it.
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@Vroomfondle1066 Then put the boot in. When you have no argument to make, avoid addressing the points made. So what interest rate do you need to cover defaults?
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What a dilbert. Interest is for giving up immediate gratification of spending your money. Interest is to cover people defaulting on their debts. Lets say you are running a credit card company. You can borrow for one year at 5%. When it comes to your customers 90% paid back in full, 10% default completely. What rate do you need to charge to just break even? No expenses, that's extra? The rate you lend at is "r" So you borrow a million you need to pay back at the end of the year 1,050,000 So what are the borrowers going to pay? Well only 90% of them are going to pay you. They need to pay back their money, the interest you have to pay, and the 10% you lose through default. You need to charge 16.67% to break even No wonder the state is in dire straits when dilberts like this think no interest. So lets cancel his pension. It's debt.
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Yes. You can't start up a bank because almost all your capital will go on regulations. I was once involved in setting a bank up. 20 people working for it. A pile of documents 5 meters tall was needed for the application.
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Correct. But here they deny that. Print and pay is the logic with this lot.
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@mk91-vz1oj And it works.
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@Vroomfondle1066 A bank has 1 million in capital from shareholders. No money creation A bank takes 5 million in deposits from customers. No money created. The bank borrows 5 million from other investors, say with bonds. No money created. The bank loans 10 million to people in the form of mortgages. No money created. ===== Banks can lend as much as they like in the UK ===== Have you not heard of CAD requirements?
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How about a tax on civil service pensions? We tax their wealth
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@edwardmclaughlin7935 There's more to it. That was quite some time ago. The requirements post 2008 have grown exponentially. For a big established player, its a fixed cost. For the big boys, spread over lots of customers its a small increase in what they charge the customers. For a small new bank its disastrous. That's why the big players demanded more regulations. It wipes out new competition. Remember to, it was systemic. Lots of banks affected. What's the common factor? Bank regulators got it wrong. ie. The State.
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