Banking review published

The Turner Review – a regulatory response to the banking crisis – has just been published. It is a highly technical and densely written 120 page analysis which needs to be gone through carefully. Anyone lacking the necessary background knowledge will be unable to grasp much of the detail.

All we can say about it is to point out yet again that the primary cause was a credit-fuelled land price bubble. These will always happen unless that is addressed, for example, by land value taxation – collection of the annual rental value of land for use as the principal source of public revenue. Such boom-busts based on land speculation with borrowed money have been occuring since the beginning of capitalism around 1800, at intervals of about 18 years. Which is just long enough for the defence mechanisms to be dismantled before the disasters occur.

A very long term view must be taken.