The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
Think about a negative-amortisation loan as an interest-only loan plus some fictional interest. This extra interest increases the bank's assets but not its liabilities, compared to an interest-only loan at a correspondingly lower interest. It's free funny-money for the bank, in that it comes with no funding cost - no extra liabilities means no need to borrow more from the CB.
Taxes don't work like that, because they have to be paid in real money, not Monopoly money. So a consumer loan to pay taxes actually increases the bank's liabilities, making it less attractive on paper.
(That, and mortgages typically come with stickier strings attached than consumer loans.)
Of course there are no regulations that a sufficiently incompetent or corrupt regulator cannot fuck up. Foolproof systems do not exist in economics, and even if they did nature is ever at work improving the stock of fools. But as a first line of defence, property taxes are not bad.
Friends come and go. Enemies accumulate.
by gmoke - Sep 27 9 comments
by gmoke - Sep 11 2 comments
by Frank Schnittger - Sep 17 126 comments
by epochepoque - Sep 4 8 comments
by Helen - Sep 6 66 comments
by Frank Schnittger - Sep 2 19 comments
by gmoke - Sep 279 comments
by gmoke - Sep 25
by Frank Schnittger - Sep 17126 comments
by gmoke - Sep 112 comments
by Helen - Sep 666 comments
by epochepoque - Sep 48 comments
by Frank Schnittger - Sep 219 comments