# Banking

Quotes about the business of Bank institutions where one can place and borrow money and take care of financial affairs.

## Quotes

* The reason that the United States had a banking industry that was radically better for the economic prosperity of the country had nothing to do with differences in the motivation of those who owned the banks. Indeed, the profit motive, which underpinned the monopolistic nature of the banking industry in Mexico, was present in the United States, too. But this profit motive was channeled differently because of the radically different U.S. institutions. The bankers faced different economic institutions, institutions that subjected them to much greater competition. And this was largely because the politicians who wrote the rules for the bankers faced very different incentives themselves, forged by different political institutions. Indeed, in the late eighteenth century, shortly after the Constitution of the United States came into operation, a banking system looking similar to that which subsequently dominated Mexico began to emerge. Politicians tried to set up state banking monopolies, which they could give to their friends and partners in exchange for part of the monopoly profits. The banks also quickly got into the business of lending money to the politicians who regulated them, just as in Mexico. But this situation was not sustainable in the United States, because the politicians who attempted to create these banking monopolies, unlike their Mexican counterparts, were subject to election and reelection. Creating banking monopolies and giving loans to politicians is good business for politicians, if they can get away with it. It is not particularly good for the citizens, however. Unlike in Mexico, in the United States the citizens could keep politicians in check and get rid of ones who would use their offices to enrich themselves or create monopolies for their cronies. In consequence, the banking monopolies crumbled. The broad distribution of political rights in the United States, especially when compared to Mexico, guaranteed equal access to finance and loans. This in turn ensured that those with ideas and inventions could benefit from them.
** Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty (2012)
* “They do not know how to do right,” declares the Lord,
    “who store up in their fortresses
    what they have plundered and looted.”
   * Amos 3:10 NIV.
* The modern banking system manufactures “money” out of nothing; and the process is, perhaps, the most, astounding piece of “sleight of hand” that was ever invented. In fact, it was not invented. It merely “grew”. … Banks in fact are able to create (and cancel) modern “deposit money”, just as much as they were originally able to create, or call in, their own original forms of private notes. They can, in fact, inflate and deflate, i.e., mint, and un-mint the modern “ledger-entry” currency.
** Angas, Major L. L. B. (Lawrence Lee Bazley) (1937). Slump ahead in bonds. Somerset Pub. Co.. pp. 20-21. OCLC 3506072.
* The best way to rob a bank is to own one.
** William K. Black, The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry (2005)
* I am just a banker "doing God’s work".
** Lloyd Blankfein, CEO, Goldman Sachs, 2009 statement. Source: Wall Street Journal, May 2010.
* Banks are the temples of America. This is a holy war. Our economy is our religion.
** Giannina Braschi, "United States of Banana," AmazonCrossing, 2011.
* Banks do not have an obligation to promote the public good.
** Alexander Dielius, CEO, Goldman Sachs, Germany, Austria, Eastern Europe, January 2010 statement, as quoted in Wall Street Journal, May 2010.
* The actual process of money creation takes place in commercial banks. As noted earlier, demand liabilities of commercial banks are money. … Confidence in these forms of money also seems to be tied in some way to the fact that assets exist on the books of the government and the banks equal to the amount of money outstanding, even though most of the assets themselves are no more than pieces of paper...
** Federal Reserve Bank of Chicago; Nichols, Dorothy M. (1961). Modern Money Mechanics; a workbook on deposits, currency and bank reserves.. p. 3. OCLC 510802. The 1992 revision of this booklet is available on wikisource
* Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU.
** Federal Reserve Bank of New York; Friedman, David H. (1977). I Bet You Thought.... p. 19. OCLC 5356154.
* The 12 regional reserve banks aren't government institutions, but corporations nominally 'owned' by member commercial banks.
** Federal Reserve Bank of New York, I Bet You Thought... (1977), p. 27.
* We are not against borrowing money and we are not against bankers. We are against trying to make borrowed money take the place of work. We are against the kind of banker who regards a business as a melon to be cut. The thing is to keep money and borrowing and finance generally in their proper place, and in order to do that one has to consider exactly for what the money is needed and how it is going to be paid off.
** Henry Ford, My Life and Work Chapter 11, Money and Goods, (1923)
* Bankers have no right to establish a customary law among themselves, at the expence of other men.
** Foster, J., Hankey v. Trotman (1746), 1 Black. Rep. 2; reported in James William Norton-Kyshe, The Dictionary of Legal Quotations (1904), p. 17.
* The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.
** John Kenneth Galbraith, Money: Whence it came, where it went (1975), p. 15.
* The process by which banks create money is so simple that the mind is repelled.
** John Kenneth Galbraith, Money: Whence it came, Where it Went p. 29.
* The use of money does not disestablish the normal process of creating credit. Money, it is true, is always being paid into the banks by the retailers and others who receive it in the course of business, and they of course receive bank credits in return for the money thus deposited. But for the manufacturers and others who have to pay money out, credits are still created by the exchange of obligations, the banker's immediate obligation being given to his customer in exchange for the customer's obligation to repay at a future date. We shall still describe this dual operation as the creation of credit. By its means the banker creates the means of payment out of nothing, whereas when he receives a bag of money from his customer, one means of payment, a bank credit, is merely substituted for another, an equal amount of cash.
** Ralph George Hawtrey, Currency and Credit (1919), p. 20
* And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
** Thomas Jefferson, 3rd US President, in a letter to John Taylor in 1816 .
* Money is created when banks lend it into existence. When a bank provides you with a $100,000 mortgage, it creates only the principal, which you spend and which then circulates in the economy. The bank expects you to pay back $200,000 over the next 20 years, but it doesn't create the second $100,000 - the interest. Instead, the bank sends you out into the tough world to battle against everybody else to bring back the second $100,000.
** Bernard Lietaer, Beyond Greed and Scarcity, YES! A Journal of Positive Futures , (Spring 1997)
* While economic textbooks claim that people and corporations are competing for markets and resources, I claim that in reality they are competing for money - using markets and resources to do so. So designing new money systems really amounts to redesigning the target that orients much human effort... Greed and competition are not a result of immutable human temperament... greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using. For example, we can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.
** Bernard Lietaer, Beyond Greed and Scarcity, YES! A Journal of Positive Futures , (Spring 1997)
* So limited is our knowledge that we resort, not to science, but to shamans. We place control of the world's largest economy in the hands of a few elderly men, the central bankers.
** Benoît Mandelbrot, The (Mis)Behavior of Markets (2004, 2008), Ch. 13, p. 254–255.
* With money every form of intercourse, and intercourse itself, is considered fortuitous for the individuals.
** Karl Marx in The German Ideology.
* We [Banks] have a "right to make a profit"
** Brian Moynihan, CEO, Bank of America, 2011 statement. Source: Money.CNN.com October 5th, 2011.
* But please do not think that I am not fond of banks, Because I think they deserve our appreciation and thanks.
** Ogden Nash. ‘Bankers are Just Like Everybody Else, Except Richer’, The Face is Familiar (1954).
* Since those who rule in the city do so because they own a lot, I suppose they're unwilling to enact laws to prevent young people who've had no discipline from spending and wasting their wealth, so that by making loans to them, secured by the young people's property, and then calling those loans in, they themselves become even richer and more honored.
** Plato, The Republic, 555c, G. Grube and C. Reeve, trans., Plato: Complete Works (1997), p. 1166.
* In the epoch of imperialism, the bankers became the aristocrats of the capitalist world.
** Walter Rodney, How Europe Underdeveloped Africa. East African Publishers. 1972. p. 162. ISBN 978-9966-25-113-8.
* There ain't nothin' to it. You go into the fancy meeting room and you just sit there and never open your yap. As long as you don't say nuthin' they don't know whether you're smart or dumb. When the question of a loan comes up, if it's a friend of yours, you vote to give it to him and if he ain't a friend, you don't.
** Casey Stengel, on his duties as "vice-president of a flourishing bank in California"; as quoted in "Try and Stop Me" by Bennett Cerf, in The Raleigh Register / Beckley Post-Herald (December 5, 1964)
* Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks — when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur... I shiver at the thought.
** Nassim Nicholas Taleb, The Black Swan: The Impact of the Highly Improbable (2007) Ch. 14: From Mediocristan to Extremism, and Back, pp. 225-226
* The banks do create money. They have been doing it for a long time, but they didn't quite realise it, and they did not admit it. Very few did. You will find it in all sorts of documents, financial textbooks, etc. But in the intervening years, and we must all be perfectly frank about these things, there has been a development of thought, until today I doubt very much whether you would get many prominent bankers to attempt to deny that banks create credit.
** H. W. White, Chairman of the Associated Banks of New Zealand, to the New Zealand Monetary Commission, 1955.
* There is no group of people on the planet more stupid than bankers. They should be called bonkers. Look at the famous banks that are suddenly losing billions, because they handed out loans like lunatics.
** Michael Winner, English film director and producer. From his interview in The Daily Mail (UK) newspaper, 17th June 2008.
* Big banks treat government fines as the cost of doing business. This settlement lets bad bank executives off the hook for allowing TD Bank to be used as a criminal slush fund. The Department of Justice and the Office of the Comptroller of the Currency need to do better in enforcing our anti-money laundering laws.”
** Elizabeth Warren accordding to TD Bank hit with record US$3 billion fine over drug cartel money laundering (October 10, 2024)

### Henry Ford: My Life and Work, Chapter 12, Money - Master or Servant (1923)

Full text online
* Bankers play far too great a part in the conduct of industry...
* The average successful banker is by no means so intelligent and resourceful a man as is the average successful business man. Yet the banker through his control of credit practically controls the average business man.
* The banker is, as I have noted, by training and because of his position, totally unsuited to the conduct of industry. If, therefore, the controllers of credit have lately acquired this very large power, is it not to be taken as a sign that there is something wrong with the financial system that gives to finance instead of to service the predominant power in industry? It was not the industrial acumen of the bankers that brought them into the management of industry.
* My objection to bankers has nothing to do with personalities. I am not against bankers as such. We stand very much in need of thoughtful men, skilled in finance. The world cannot go on without banking facilities. We have to have money. We have to have credit. Otherwise the fruits of production could not be exchanged. We have to have capital. Without it there could be no production. But whether we have based our banking and our credit on the right foundation is quite another matter.
* The bankers who do straight banking should regard themselves as naturally the first men to probe and understand our monetary system—instead of being content with the mastery of local banking-house methods; and if they would deprive the gamblers in bank balances of the name of "banker" and oust them once for all from the place of influence which that name gives them, banking would be restored and established as the public service it ought to be, and the iniquities of the present monetary system and financial devices would be lifted from the shoulders of the people.
* If the present faulty system is more profitable to a financier than a more perfect system would be, and if that financier values his few remaining years of personal profits more highly than he would value the honour of making a contribution to the life of the world by helping to erect a better system, then there is no way of preventing a clash of interests. But it is fair to say to the selfish financial interests that, if their fight is waged to perpetuate a system just because it profits them, then their fight is already lost. Why should finance fear? The world will still be here. Men will do business with one another. There will be money and there will be need of masters of the mechanism of money. Nothing is going to depart but the knots and tangles. There will be some readjustments, of course. Banks will no longer be the masters of industry. They will be the servants of industry.
* Business will control money instead of money controlling business. The ruinous interest system will be greatly modified. Banking will not be a risk, but a service. Banks will begin to do much more for the people than they do now, and instead of being the most expensive businesses in the world to manage, and the most highly profitable in the matter of dividends, they will become less costly, and the profits of their operation will go to the community which they serve.

## Disputed

* The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt modern civilization.
** Sometimes attributed to Otto von Bismarck, German Chancellor (1815-1898). The apparent source of this is a German-American named Conrad Siem (d. 1931), who, in 1915, published recollections of conversations he allegedly had as a youth (about 12 years old) with Bismarck 37 years earlier. Should be treated skeptically. Siem, Conrad (1915). The C.S.L.T.: containing views on Abraham Lincoln as expressed by Bismarck in 1878, from the recollections of Conrad von Bauditz Siem. OCLC 52297724.
* The bank hath benefit of interest on all moneys which it creates out of nothing.
** Attributed to William Paterson, founder of the Bank of England. No primary source for this has been found. This quote is said to be from the prospectus for the Bank of England, but it does not not appear in A Brief Account of the Intended Bank of England or elsewhere in The Writings of William Paterson. The earliest known appearance is from the 1930s.
* Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take this power away from them, and all the great fortunes disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create money and control credit.
** Attributed to Josiah Stamp by Silas W. Adams in The Legalized Crime of Banking (1958).

## See also

* Economics
* Money