A New York Times columnist David Leonhardt, in commenting on the vanishing of trust in the banking system, wrote: “Banks now look at longtime customers and think of that old refrain from a failed marriage: I feel like I don’t even know you.” Much has been written in the economics literature about the central role of the financial and banking system in the economy.
Real investment in an economy, which generates economic growth and jobs, requires funding. Similarly, households require funding to finance housing and other forms of expenditure, whether of a longer-term investment nature, such as education, or more consumer-type expenditure. Banks and other financial intermediaries play a unique role in channeling savings to investors.