Title: The origins and consequences of bankers' power

Authors: Norbert Haering

Addresses: Butzbacher Str. 2, D-60389 Frankfurt am Main, Germany

Abstract: This paper explores the origins of the extraordinary political power of the financial industry. It results from a centuries-old symbiotic relationship between private financiers and governments. Bankers obtained the right to issue money and the backing of central banks a lender of last resort, to bail them out as needed. If central banks would assume a larger share of the overall money creation rather than private banks, this would attenuate credit driven boom-bust cycles and provide governments with non-distortionary seignorage-income. Achieving such fundamental reforms will only be possible if the political clout of the banking industry is broken by judicial intervention or a voter revolt.

Keywords: banks; financial sector; banker power; bankers; political power; private financiers; governments.

DOI: 10.1504/IJPEE.2010.034687

International Journal of Pluralism and Economics Education, 2010 Vol.1 No.3, pp.242 - 259

Published online: 17 Aug 2010 *

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