Since 2008, I'm not really quite sure what we've learned. Most politicians don't realise that banks have that power. They see banks as just being into majories that transfer money from savers to borrowers. The reality is the banks create money when they lend. And that is an enormous power that they use and that power is why they've got the ear of the politicians. No, it's not an introduction agency. The banks are just self-satisfying themselves. Yeah. So, but we can't buy them out because they are institutions that keep on going.
We last had a financial crisis in 2008 (ignoring the pandemic years), and if we’re not in another crisis now, we’re well on the way to it, with mortgages rising, taxes increasing and the price of everything continuing to rise. Your spending power is being hit in three directions. But, isn’t that what central banks want? So we spend less and inflation comes down, theoretically. Yet the banks, who might not be to blame this time, are now feeling the hurt. In fact, they stand to gain from rising interest rates because they can raise their borrowing costs. This week Phil asks Steve, will the banks always win, come what may?
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