We must realize that the traditional factors of production named in economics textbooks are no longer relevant in the banking industry. Land, labour, physical capital and enterprise have given way to skills, technology and human capital as the prime factors of production in the banking sector. Employees are no longer “labour”, they are “people” who ought to be nurtured and cared for.
Praet: “Some bankers assert that an increase in the deposit rate would actually constitute a loosening of our policy, as banks would then give more credit. But as I said, lending levels are already developing well. No one likes the current environment. Not even me – I’d love to see higher growth and investment and more structural reforms.