Archives for

interest

The Bank-State Bargain

Banks create money out of nothing when they extend loans and then charge borrowers interest on this newly created capital. The result is an ongoing multi-billion pound/ dollar subsidy breaking the basic rules of capitalism. What is perhaps even more surprising is that there appears to be no explicit description of the 'bargain' underlying this important arrangement. By Graham Barnes.

From our archives: why interest-free banking matters

Interest-free banking, such as that carried out by the JAK banks in Scandinavia, has been attracting considerable attention lately. But does it really matter whether a bank charges interest or not? After all, every bank has to charge for its services or it won't stay in business. This article by Richard Douthwaite and John Jopling from the second Feasta Review discusses the issue.