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Financial Stuff Outside the Box

Touch the Soil News #616 (feature photo CC SA 3.0) The cornerstone of the financial system – upon which the economy hinges – is the banking system. In the aftermath of the 2008 financial crisis, the Frank-Dodd Act tried to manage the risks banks take. In the process, banks needed to build more equity. The theory is that if banks have more equity, they will have a greater cushion for adversity before the FDIC has to step in and protect deposits. To make it simple, let’s assume the banking industry is a house worth $100,000. As of 12/31/2008, the banking system would have had debts of $90,700 against the $100,000…

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