Credit Crisis

Banks are generally considered to be utilities that allow for the transmission of value on a daily basis in modern society, but they also seem to create devastating events like credit crises by the manufacture of credit. How this power originated in human society is of interest. Most animals produce some degree of savings, either in caching from one season to the next or for later in one season. Often these savings are an intergenerational transfer for the initial survival of young as in some wasps, or in a later use by the same individual who produces the savings either in the same year or the next as in many birds. The evolution of the bank, of institutions for organizing the savings of groups of humans has had a number of separate points of origin in history in various societies in antiquity and most recently during the Middle Ages in Europe. The history of banking illuminates the nature of contemporary fears about banks. Why banks are seen as necessary and deserving of saving or protecting during economic crises often seems a matter of faith or dogma than of necessity. This is why neither Bush nor Obama’s advisors, nor the EU have crafted as bold actions as FDR.