Risk is the reason the economy is not growing

posted by
November 29, 2011
Adam Smith Institute
by Peter Morgan  
Posted in Commentary

"[B]anks are not lending the money they have. This is partly due to the increase in the required assets they have to hold to cover depositor’s withdrawals, as a result of the financial crisis (capital ratio). But it is mainly as a result of the banks fear of the risk in the market. This fear has prevented growth by stopping the natural transition of money from savers to consumers through the saving mechanism." (11/29/11)

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