Forum members may be interested in this report, which offers an insight into how a substantial amount of public funds is being diverted into additional profits for banks instead of being used (for example) on social care or welfare. There is growing interest in the idea of a Public Bank for Wales, with a Welsh Government scoping study due for release in August. The NEF report appears to reinforce the merits of such a development.
Making Money from Making Money
A recent report from the New Economics Foundation shows that “in the UK, commercial bank seigniorage profits amount to a hidden annual subsidy of £23 billion, representing 73% of banks’ profits after provisions and taxes”.
It concludes that “seigniorage profits could be seen as another form of public subsidy for the banking sector, supporting excessive pay and non-value-creating lending that contributes to rising house price and financial-asset prices”.