Hello,


More of my philosophy about the banking system and more...

I am a white arab from Morocco, and i think i am smart since i have also invented many scalable algorithms and algorithms..


Banks are highly leveraged institutions, financed in part by interbank credits and, hence, prone to crises of confidence that can quickly spread. In most developed nations banking systems appear reasonably solid. Japan has been somewhat of an exception,
but there have been some positive signs there, as well. Banks have been recognizing losses, and the government seems finally to be appropriately addressing their problems. And in a large number of emerging nations banks are in poor shape. Lax lending has
created a high incidence of non performing loans, supported by inadequate capital, leaving banks vulnerable to declines in collateral values and nonperformance by borrowers. So as i said
below that Financial institutions in most of the developed countries are generally less vulnerable today than they were before the crisis, with stronger capital and liquidity buffers and a reduced reliance.

Read the following article so that to understand more:

The Weakest Links In The Chain

https://www.business-standard.com/article/specials/the-weakest-links-in-the-chain-197120901001_1.html

More of my philosophy about stability of the financial sector and more..

I think from the following report that Financial institutions in most of the developed countries are generally less vulnerable today than they were before the crisis, with stronger capital and liquidity buffers and a reduced reliance, read more here to
notice it:

Potential Emerging Threats to U.S. Financial Stability

https://www.treasury.gov/initiatives/fsoc/Documents/Potential%20Emerging%20Threats%20to%20U.S.%20Financial%20Stability.pdf

And read my previous thoughts so that to understand more:

More of my philosophy about the financial sector and more..

I invite you to read the following interesting paper from the Journal of Economic Perspectives, that i have just read carefully, about "The Growth of Finance" by Robin Greenwood and David Scharfstein:

https://www.hbs.edu/ris/Publication%20Files/Growth%20of%20Finance_6ec86a21-8e68-4abc-bb09-45abaacd7be5.pdf

I think i am smart, and i say that i think there is a problem
with the financial sector and it is that in the first theoretical implementation of the financial sector was that a primary function of the financial sector is to dampen the effects of risk by reallocating it efficiently to parties that can bear risks
the most easily (read about it on the paper of Merton and Bodie 1995), but there was some practical constraints in the reality and it was about the benefits of expanding access to mortgage credit, there are a number of societal costs from such an
expansion, including instability from excessive household leverage. Moreover, the shadow banking system that facilitated this expansion made the financial system more fragile. And it was also the cause of the financial USA crisis of the 2007-2009 that
began years earlier with cheap credit and lax lending standards that fueled a housing bubble, so i think that we have not to make again those mistakes in the financial sector from toxic assets and from "bad loans", so we have to "higher" the standards of
the loans etc. in the financial sector.

And here is my other thoughts about the other problem of financial sector:

And here is how i will explain it more, look at Financial sector,
so you can understand more capitalism and the mechanism of diversity that brings "resilience" and that needs a good allocation of resources in capitalism by reading my following thoughts:

The biggest benefit of finance, is to provide opportunities to people,
in the sense that in a world where there is no finance, the only way to
start a company is to be born rich or to have saved for a long time. In
a world where finance works well, the people with talent can actually
start firms and reach their dreams without waiting to either have saved
the money, or be lucky and receive it from their parents, and once you
create this opportunity, you will have the most talented people take
advantage of those opportunities, which favors growth, which favors a
good allocation of resources and, ultimately, innovation. But we have to
know what is the problem with finance, and here it is, read the
following so that to understand:

One last chance to fix capitalism

Read more here:

https://hbr.org/2020/03/one-last-chance-to-fix-capitalism

So i invite you to look at the following video about capitalism:

How to Improve Capitalism

https://www.youtube.com/watch?v=YOaJe68C-bU

So as you notice in the above video that you can also fix capitalism by
giving voting rights and tax advantages to long-term shareholders and
not by raising taxes, and you need to have sovereign wealth funds and
national pension funds representative of the long term collective
interests etc, so i invite you to look the above video of "How to
improve capitalism" so that to understand more.

And if you want to know more about my views on capitalism,
read them here:

https://groups.google.com/g/alt.culture.morocco/c/cf3Wa4z8Xmc


Thank you,
Amine Moulay Ramdane.

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