Money Without Protection

There is too much money around, but people have realized that by keeping their money at home, at a two percent daily inflation, they are evidently at a loss. Compared to this, several hours of waiting in line in front of a bank is not too much, especially since the weather is still relatively nice. Without a guarantor: We live at a time when private and mixed banks are founded almost every day. When opening, one of these banks thought of a witty commercial slogan: "The state does not guarantee for us". Humor always catches the essence of things. In this case it goes even further. The existing socially owned banks are burdened by bad investments for which they cannot collect money, they are inert and inclined to transfer the obligations from their contracts onto the state. These banks can be insolvent, but they cannot go bankrupt. The state guarantees for them, among other things, by not carrying out the regulations for starting bankruptcy procedures. On the other hand, private banks can't even think of being insolvent or of being irregular in fulfilling their obligations. They turn over money quickly and offer much more favorable conditions to bank account owners. They make breakthroughs on the money market and expand incredibly fast. No one guarantees for them. We repeat - no one. And that is where the witty commercial caught more than it was aiming at. A new banking system, efficient and penetrating, unburdened by debts and by the protection of politics, is being created and expanding without any support from the state. A state does not exist in order for the people to know what authority is. The state is, primarily, expected to offer its citizens legal security. The guarantee of the inviolability of private property and of the obligation to fulfil freely signed contracts represents the first step in guaranteeing human rights. At the same time, a modern state must do even more for its citizens and guarantee for their money. After the big economic crisis in 1929, many countries formed special state agencies for securing deposits. Their histories are also not unblemished, which the recent American experience with institutes for savings and loans showed, but there exists the general belief that a state control of financial dealings and special state institutions guaranteeing small deposits represent a minimum of security which a modern state should ensure for its citizens. Awaiting such a state, citizens here continue to play poker with their hard currency savings. One should not blame them. If they can earn 100 or 200 Deutsche marks worth of interests every month and when this amount represents an average monthly salary at a time when fewer and fewer people are working, then this game with hard currency savings remains the last resort. In this regard, one gains the impression that both partners in the game are aware of the risk, while the state stands aside and awaits the outcome. This is the best solution for the state as it is today, but it is difficult to believe that the new banking system will be able to become a predominant sector of the Yugoslav money industry without help and without problems. Its possible failure would represent yet another big disappointment. It would seem to the people that they had tried everything but that nothing works. Such a disappointment can be prevented. It would be good for the federation to reactivate the old idea for an Agency for rehabilitating banks, or some other new institution to take over the job of securing the citizens' deposits. Along with this obligation, it would also control the financial dealings of the banks that voluntarily entrust it with securing their deposits. In this way both the citizens and the state would be protected, and the private sector would gain a necessary doze of security.