On Nov 13, 2007, at 2:20 PM, Charles Brown wrote:
Is the current US system a combination Central Bank/Stock Market one ?
You've brought this up before. I think you're confusing central bank and bank-centered. Everybody has a central bank, even Cuba. It's the institution at the center of a country's financial system, and is part of the government (though usually independent of it to some degree). Examples: the Federal Reserve, the Bank of Sweden (the world's oldest), the Bank of England (the second-oldest). A bank- centered system is once in which banks provide the major outside finance to private firms, and often hold controlling blocks of stock; the stock market is relatively unimportant. Leading example: Germany, and to a lesser degree Japan. Bank-centered systems are giving way to the Anglo-American model in which the stock market is crucial - not for providing outside finance, but for guiding management (low stock price = trouble, do something!) and for organizing ownership (buy up the stock and you own it). Doug
