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Are bankers necessary?

Rants Banks used to be places with big vaults where they stored lots of shoe boxes, each with the name of a customer and containing the customers' hard-earned money. Incredibly clever bankers would wave their magic wands over the shoe boxes each year and magically make the money increase by 5% or more. The way they did was to 'borrow' money from their customers' accounts and lend this money to other customers who would pay large amounts of interest to the bank for this privilege.

In those days, there were many branches where customers could go in and have a nice chat with the bank manager, who would actually know their customers. The current infatuation with identification checks wasn't really necessary as the staff knew who you were.

In digitally advanced countries, such as New Zealand, you don't need any cash as almost everything can be purchased with a debit card, including buying a halibut from the back of a travelling fishmonger's van. It can't be too long before cash is no longer required. Even in less digital countries, most transactions can be carried out online, with the result that the number of branches where you can go and chat with staff who know you is reducing rapidly.

The back-room-wizards who used to increase our bank accounts by 5-10% each year seem to have lost their magic powers and yet bankers still require trucks to carry home their annual bonus. But what if we should pop along to the remaining bank branches not staffed by robots and demand our money? This is referred to as a run on the bank and would cause the banks to crash because the money we put in our shoe boxes is not longer there as it has been invested in other projects but, unlike in earlier days, these projects no longer seem to make any money, or at least they don't make money for the customers, only for the bankers.

So the main reason we put money into banks would appear to be to pay the inflated salaries of the bankers as there appear to be few benefits to the customer. In fact, are banks just big Ponzi schemes? According to Wikipedia, a Ponzi scheme is a fraudulent investment operation where the operator, an individual or organisation, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources.

If we can do everything digitally and the bankers are unable to pay us interest do we really need banks or bankers? Could bankers be released into the world to go and do something useful with their lives and, if so, what could they do?


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