THE ACCOUNTING BLACK HOLE IN THE MODERN BANK BALANCE The core problem is that money created by the banks is not reflected in their accounting because it is not registered as an asset at the time of creation. They only register the money created as a Liability. But if we reform their accounting system, by making it equal to regular firm accounting, then the seigniorage will emerge from the books. I.e. A bank create money (+100) and add it to asset side, then she loan the money WITHOUT INTEREST and write the sum in the liability(-100). The sum is then zero. When the loan money come back to the bank (any sum between 0 and 100...), the reflux thus obtained can be taxed for seigniorage by the State, the profits can be shared between shareholders. Everybody is happy ! And banks wont have to face any crisis anymore .
Posted on: Sun, 13 Apr 2014 16:01:46 +0000
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