What are banks for? A personal view

What exactly are the proper functions of a bank?

I would suggest that the main ones are (1) Cash handling and transfer (2) To provide a deposit facility and (3) to arrange credit.

It is not necessary to charge interest, nor should it be expected as a reward to depositors. All of these are services which can be provided at cost. Credit is slightly problematical since risk is involved, but that is essentially a matter of prudence, combined with insurance cover.

This is essentially the situation that would arise if anyone took Leviticus 25 seriously.

The present troubles have arisen due to the misuse of credit, for the purchase of consumer goods and, above all, for land, the problem being compounded when the land title itself is used as collateral. In effect, the bank is the landowner for the period of the loan and the “interest” is economic rent of land.

This is unfortunately the contemporary banking model. It has repeatedly been tried and found wanting. It needs to stop.