For American taxpayers, the Savings and Loans debacle was a hugely expensive lesson in the perils of ill-considered deregulation.

Their source of profits lay in maximizing the difference between the costs of their liabilities and the earnings on their assets, without reducing reserves to such an extent that the bank became vulnerable to a run – a crisis of confidence in a bank’s ability to satisfy depositors, which leads to escalating withdrawals and ultimately bankruptcy: li

a) cashless intra-bank and interbank transactions b) fractional reserve banking and c) central bank monopolies on note issue, the very nature of money evolved in a profoundly important way.

In 1947 the total value added by the financial sector to US gross domestic product was 2.3 per cent; by 2007 its contribution had risen to 8.1 per cent of GDP. In other words, approximately $1 of every $13 paid to employees in the United States now went to people working in finance.5 Finance had become even more important in Britain, where it accou

The central relationship that money crystallizes is between lender and borrower.

What the conquistadors failed to understand is that money is a matter of belief, even faith: belief in the person paying us; belief in the person issuing the money he uses or the institution that honours his cheques or transfers.

Economies that combined all these institutional innovations – banks, bond markets, stock markets, insurance and property-owning democracy – performed better over the long run than those that did not, because financial intermediation generally permits a more efficient allocation of resources

would be a mistake to assume that microfinance is the holy grail solution to the problem of global poverty, any more than is Hernando de Soto’s property rights prescription.

key components of the financial system: the bond market, the stock market, the insurance market, the real estate market and the extraordinary globalization of all these markets