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Published in:
2018 | OriginalPaper | Chapter
16. The Context
Authors : Magnus Lind, Kelly Barner
Published in: Finance Unleashed
Publisher: Springer International Publishing
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Abstract
The primary purpose of the banks is to fund the government directly as well as indirectly via real estate and private households. This has been an underlying theme in all financial regulations (especially by current regulatory regimes) passed since the 1980’s. The intent of these regulations is not to decrease the level of debt in the economy or to fund the corporate sector, but to ensure that the government always has access to the cheapest cash, either because the banks (including the central banks) buy their bonds and debt papers or through financing households so they can continue to consume and pay taxes.