10th October Ghent

** Goedemorgen from Ghent, Belgium. My last full day here and I have some really important stuff to do today. It is laundry washing day, yet again. I have now officially run out of Euros so I need to find a bank or money changer to get some of the valuable plastic notes to feed the machines that will convert my weeks plus worth of dirty clothing into something I will once again have a desire to wear. 

I believe both money changers and laundromats are relatively local, a distance luxury I have not been privy to since my journy began. Experience tells me that most of my morning will be consumed with achieving this outcome. I will then have the afternoon to continue looking around this so interesting a town. 

So found both the money changer & the laundromat. All finished by 11:30.

** The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 202

The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 to

Ben S. Bernanke The Brookings Institution, Washington DC, USA

Douglas W. DiamondUniversity of Chicago, IL, USA

Philip H. Dybvig Washington University in St. Louis, MO, USA

“for research on banks and financial crises”

Their discoveries improved how society deals with financial crises

This year’s laureates in the Economic Sciences, Ben Bernanke, Douglas Diamond and Philip Dybvig, have significantly improved our understanding of the role of banks in the economy, particularly during financial crises. An important finding in their research is why avoiding bank collapses is vital.

Modern banking research clarifies why we have banks, how to make them less vulnerable in crises and how bank collapses exacerbate financial crises. The foundations of this research were laid by Ben Bernanke, Douglas Diamond and Philip Dybvig in the early 1980s. Their analyses have been of great practical importance in regulating financial markets and dealing with financial crises

For the economy to function, savings must be channelled to investments. However, there is a conflict here: savers want instant access to their money in case of unexpected outlays, while businesses and homeowners need to know they will not be forced to repay their loans prematurely. In their theory, Diamond and Dybvig show how banks offer an optimal solution to this problem. By acting as intermediaries that accept deposits from many savers, banks can allow depositors to access their money when they wish, while also offering long-term loans to borrowers.

However, their analysis also showed how the combination of these two activities makes banks vulnerable to rumours about their imminent collapse. If a large number of savers simultaneously run to the bank to withdraw their money, the rumour may become a self-fulfilling prophecy – a bank run occurs and the bank collapses. These dangerous dynamics can be prevented through the government providing deposit insurance and acting as a lender of last resort to banks.

Diamond demonstrated how banks perform another societally important function. As intermediaries between many savers and borrowers, banks are better suited to assessing borrowers’ creditworthiness and ensuring that loans are used for good investments.

Ben Bernanke analysed the Great Depression of the 1930s, the worst economic crisis in modern history. Among other things, he showed how bank runs were a decisive factor in the crisis becoming so deep and prolonged. When the banks collapsed, valuable information about borrowers was lost and could not be recreated quickly. Society’s ability to channel savings to productive investments was thus severely diminished.

“The laureates’ insights have improved our ability to avoid both serious crises and expensive bailouts,” says Tore Ellingsen, Chair of the Committee for the Prize in Economic Sciences.

** Went for a very long stroll after myand soon realised that what I thought was old Ghent, wasn't. This is a lovely Middle Ages through to Renaissance town. It has been well worth coming here for a few days. Having not ever been to Antwerp I cannot compare the two places, but if you are at a loose end, and are in Netherlands or Belgium go for it.

Images from my stroll below