Robert Lloyd, CFA
Inflation Series: Part 7 Bank Regulations Contribution To Inflation
Before you claw your eyes out over the title, just look at all the innovation that happened in the 1960s and 1970s. (Table below)
Not only were banks interested in lending money because rates were rising, but it was also EASIER to originate and move around credit exposure. This increased the speed of money moving around the economy, increasing the effective money supply.
This is not happening today. The most recent pieces of bank legislation were tweaks to the 2010 Dodd-Frank law passed after the financial crisis that made banking more difficult. In this recession, the financial risks are not concentrated in banks, but spread out among mutual funds, pension funds, insurance companies and private equity firms.
The one financial area NOT heavily regulated is cryptocurrency. The recent FTX bankruptcy has many wondering if this whole space is a big ponzi scheme.
If you'd like to discuss how to manage your portfolio through this environment, please reach out to us at firstname.lastname@example.org.
Robert Lloyd, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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