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Extract from pages 123-124:
"In their balance sheets, banks list deposits and current
accounts on the liability side. This wouldn’t make sense
(it’s as if a garage manager were to enter parked cars on
the liability side!) if it weren’t essential to conceal the way
the banks themselves actually work; listing deposits as
liabilities in the balance sheet is the only way of concealing
the banks’ colossal assets (generated, over time, by their
impressive gross operating margin between interest
income from loans – on the one hand – and operating
costs with the interest on deposits, on the other).
Operating margins (loans + interest income minus
costs and interest expense) could exceed 90% and would
be taxable in the absence of bad debts (loans that have
become definitively uncollectable or “non performing”,
not paid back as expected during the financial year).
Under normal conditions, therefore, fiscal revenue
would double and the State would balance its budget by
applying on average a 20%, or slightly higher, income
tax rate; in the event of a crisis, there would be a rise in
the number of overdue debts (actually reduced revenue
growth rather than losses), bank margins would drop and
the State would have to deal with the situation by posting
a deficit or printing money until conditions for the full
employment of resources were re-established: which
ought to suggest a return to a balanced budget.
So, it becomes obvious why banks conceal their
operating margins (listing deposits, current accounts,
etc. on the liability side); as briefly mentioned, in theory,
overdue items constitute reduced revenue growth rather
than losses and the only danger for banks would be if
clients – fearing they might lose their savings – were en
masse to withdraw their money: there wouldn’t be enough
liquidity to meet more than 4-5% of demand simply
because liquidity is only 4-5% of total holdings, 95-96%
of which is made up of loans or fiduciary and bank money."
Page 181: "Historically, bankers (and anyone acting on their behalf) have always been overly keen to make sure that no one actually understood how a bank works, or rather how banks work. The reason is very simple: by including only interests and other costs, but none of the sums deposited by clients(for whatever reason) in the financial statements, the entire operating margin these credit institutions would be fully evident: consequently, they would be required to pay high taxes and, above all, it would be even too obvious that loans could be managed with negative interest rates without giving rise to “losses”, but only reduced revenue growth. "