Hypothetically, banks were organized to lend money to small businesses that had promise, that filled a real social need. Today banks intentionally make loans in risky situations so they can charge high interests rates and then claim their investment as a profit even if the organization they gave the loan to files for bankrupt. This is one reason why there is a contradiction between how the stock market is doing vs how the physical, provisioning economy is doing. Michael Hudson offers case studies of Canada, Yankeedom and China as examples.
Read Michael Hudson
