Posted by: graemebird | October 9, 2008

Limited Liability/Natural Law/And Banks

As you can see I’ve brought my post on how I think limited liability ought to be handled to the front.

The conclusion of these musings was that limited liability ought to imply total equity financing. And that the legitimacy of a seperatre non-human legal entity comes from the justice and clarity of its articles of association. From how well these articles harmonise the interests of the participants in the corporation and resolve in advance the potential for conflict and conflict of interest.

Now how does that apply to banks?

Clearly, since banks deal in debt, on both sides of their balance sheet…… clearly under this dispensation, banks would NEVER have the priviledge of limited liability.

Just work the numbers in your own mind as to how that would work.

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