Abstract
Loans finance the future. If the economy’s goal is the satisfaction of human needs and to increase the common good, and if money is a public good to serve these goals, then the lending regulations for banks should in turn support the achievement of these goals. This chapter proposes that loans should only be used (a) for real investments (b) that do not harm the common good and (c) with a priority for the region in which banks operate. Every loan should be subject to an ethical risk assessment before the assessment of the financial risk for the investor and bank, as the financial risk assessment similar to the ROI does not reveal any reliable information about the impact of that investment, and about the loan which is granted to enable this, on aspects such as the environment, social cohesion, distribution, trust, dignity, gender equality, or democracy. Only if an investment does not diminish these fundamental values, will a loan be granted—the loan will be cheaper the more value it adds.
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Notes
- 1.
Art. 151, Constitution of Bavaria.
- 2.
Constitution of Italy, Art. 41.
- 3.
Basic Law for the Federal Republic of Germany from 1949, Art. 14 (2).
- 4.
Constitution of Spain, Art. 128.
- 5.
Swiss Federal Constituion 18 April 1999 (As per: 1 January 2011), Art. 100 (3).
- 6.
Art. 151 (2), Constitution of Bavaria.
- 7.
Die Presse, 17 October 2013.
- 8.
According to the Bundesbank private financial assets in Germany as per 30 June 2013 amounted to 4992 billion euros, economic output for 2013 was forecasted to be 2650 billion euros at the end of the first half of the year.
- 9.
Frankfurter Allgemeine Zeitung, 9 August 2013.
- 10.
Der Standard, 14 July 2010.
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Felber, C. (2017). Bank Lending Regulations. In: Money - The New Rules of the Game . Springer, Cham. https://doi.org/10.1007/978-3-319-67352-3_9
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