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 joelado - Oct 20 10 comments
by Frank Schnittger - Oct 19 22 comments
by Frank Schnittger - Oct 16 7 comments
by Frank Schnittger - Oct 14 1 comment
by Frank Schnittger - Oct 5 127 comments
by DoDo - Oct 2 10 comments
by gmoke - Sep 27 9 comments
by joelado - Oct 2010 comments
by Frank Schnittger - Oct 1922 comments
by Frank Schnittger - Oct 167 comments
by Frank Schnittger - Oct 141 comment
by Frank Schnittger - Oct 5127 comments
by DoDo - Oct 210 comments
by gmoke - Sep 279 comments