The Bank - An Institution Coming to an End? The Absurdity of Bail-Out Programs: A Vision for a Fundamental Reform of the Financial Sector (Die Institution „Bank“ ist am Ende – das Absurdum Bankenrettung. Plädoyer für eine grundlegende Neuordnung des Finanzsystems)

Abstract

The current focus of financial policy measures in nearly all G20 countries is to rescue commercial banks by running high bail-out programs. If banks can be bailed-out, or rescued from their present plight, everything will be getting better - that is, by large, the self-proclaimed belief, or faith, of politicians who struggle to overcome the international financial crisis. But why? Why do the Western industrial countries invest countless billions of taxpayers' money and spend it on the restoration of an institution which de facto has failed to be an effective type of organization of market-based financial business processes? Tracing the development line of the banking sector of past decades a general trend towards disintermediation and decentralization is noticeable. However the final evolutionary step in this overall trend is missing: the establishment of a virtual market place for capital transactions without commercial banks acting as intermediary. The goal of this article is to develop an outline for a fundamental reorganisation of the financial sector.