It's a long article and I admit to not heaving read it in its entirety, but...
> There are overcapacities in the banking sector of some countries” in the Eurozone. Which country could he have been talking about? Germany boasts by far the largest number of banks – about ten times as many as the global centre of international finance, the UK.
Same here in Austria. Per capita, the people employed in the banking sector is significantly higher than in other countries.
I work in this sector, and the overcapacity is notable. To question this is basically a statement of ignorance.
> 80% of these banks in Germany are local, not-for-profit community banks, which do not pay bankers’ bonuses, and which serve ordinary people and small firms, creating a strong SME sector (the main employer in most countries).
Without knowing the German banking sector that well, this is almost certainly hyperbole.
I believe he is talking about Genossenschaftsbanken, Raiffeisen et al. There's a historical reason why these banks have most of the banking licenses issued (the 80% he alludes to), but that reason is no longer relevant. It's also misleading, since most of these banks are tiny, basically your typical savings & loan.
> Why is the ECB taking policies that are killing the majority of banks in the Eurozone – the beneficial not-for-profit community banks – while helping big banks with its asset purchases?
Because it's an anachronism. There was a time in Austria when we had the saying "A Raika (Raiffeisen Bank) and Post in every village", regardless of the village size. This is where the insane 80%-number comes from!
This is horribly inefficient. It might have been a valid approach at a time when everything was rural and a village was effectively a microcosm, but in today's world with online banking and such, it's horribly outdated.
Operating these banks costs money. These costs are passed on to the customers. Reducing the banking sector size is therefore in the interest of the customers.
> Central banks have proposed the abolition of cash
No, they haven't. Some guys employed there might have toyed with the idea as a thought experiment, but nobody even close to policy-making has proposed such nonsense, not that it would work anyway.
> Central banks have proposed the introduction of central bank cybercurrency
I'd trust a central bank far more than Coinbase or any other of the centralized controllers of currently-so-popular cybercurrencies.
I've spotted numerous other smells in the article, but the above were the easiest to point out.
Many co-op banks are merging into bigger ones these days, they are still local banks which are owned by members of the co-op which are usually people from the region. There are also several bigger co-op banks or rather supra-regional banks. But even small and medium sized banks need regulations and that is what the central bank can really do.
> Same here in Austria. Per capita, the people employed in the banking sector is significantly higher than in other countries.
Yet it's usually a hassle to find an ATM in Austria (which is the most important thing related to banking that I can't do online), because ATMs are usually only located at banks.
Compare that to the US where every other shop as a private ATM that you can use. They usually charge $2 or something like that, but (better) banks usually refund those fees at the end of the month.
On the other hand, as soon as banks become really big, they loose interest in ordinary customers.
In Switzerland the services of big banks like Credit Suisse or UBS are getting worse while getting more expensive at the same time.
This causes people to switch to smaller local banks because they can better tend to their needs and are more willed to grant them loans.
> There are overcapacities in the banking sector of some countries” in the Eurozone. Which country could he have been talking about? Germany boasts by far the largest number of banks – about ten times as many as the global centre of international finance, the UK.
Same here in Austria. Per capita, the people employed in the banking sector is significantly higher than in other countries.
I work in this sector, and the overcapacity is notable. To question this is basically a statement of ignorance.
> 80% of these banks in Germany are local, not-for-profit community banks, which do not pay bankers’ bonuses, and which serve ordinary people and small firms, creating a strong SME sector (the main employer in most countries).
Without knowing the German banking sector that well, this is almost certainly hyperbole.
I believe he is talking about Genossenschaftsbanken, Raiffeisen et al. There's a historical reason why these banks have most of the banking licenses issued (the 80% he alludes to), but that reason is no longer relevant. It's also misleading, since most of these banks are tiny, basically your typical savings & loan.
> Why is the ECB taking policies that are killing the majority of banks in the Eurozone – the beneficial not-for-profit community banks – while helping big banks with its asset purchases?
Because it's an anachronism. There was a time in Austria when we had the saying "A Raika (Raiffeisen Bank) and Post in every village", regardless of the village size. This is where the insane 80%-number comes from!
This is horribly inefficient. It might have been a valid approach at a time when everything was rural and a village was effectively a microcosm, but in today's world with online banking and such, it's horribly outdated.
Operating these banks costs money. These costs are passed on to the customers. Reducing the banking sector size is therefore in the interest of the customers.
> Central banks have proposed the abolition of cash
No, they haven't. Some guys employed there might have toyed with the idea as a thought experiment, but nobody even close to policy-making has proposed such nonsense, not that it would work anyway.
> Central banks have proposed the introduction of central bank cybercurrency
I'd trust a central bank far more than Coinbase or any other of the centralized controllers of currently-so-popular cybercurrencies.
I've spotted numerous other smells in the article, but the above were the easiest to point out.