Tuesday, 7 October 2008

Credit as utility

Populist attacks against the financial industry, both from the Right and from the Left, often portray the dispersal of credit as an innately fraudulent activity. But it seems important to remember that credit provides a useful, dare I say it, essential function in complex societies.

So useful is credit that it is helpful to regard credit as a utility, just like other essentials, such as water and electricity. And the consequence of seeing credit as a utility is to then understand why the credit business is different from other businesses, and the level of regulation that it needs.

Here's an article that discusses this a bit.

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