DB3 - Forgotten Depression of 1921. Modern Banking Systems. Accounting, Finance, SPSS Essay

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Modern Banking Systems
Jim Grant’s opinions on the role of the financial institutions on the country's economy might seem biased and skeptical as observed from his seminars and articles. Jim Grant argues that asset valuation carries more weight in offsetting economic imbalances compared to the monetary value that the Federal Reserve mainly focuses on (Talks at Google). Grant justifies his opinions by comparing the two economic turmoil’s of 1921 and 1929 that the respective administrations took different approaches to salvage the situations, Grant seemingly siding with the approach that Woodrow and Harding's administration undertook (Talks at Google). Although Grant’s idea of discrediting federal bank’s intervention in restoring economic stability might seem valid, banks have contributed in several ways towards the realization of the industrialized economy. 
Individuals entrust banks with their fortunes by allowing them to collect their savings. In return, the individuals acquire interest while the bank lends out these monies to investors and manufacturers thus facilitating industrial development. Most significantly, the borrowing and lending process carried by banks is much organized and efficient compared to a local arrangement between a borrower and a lender. Industrial bank, which is a special kind of bank, contributes to the industrialization process by offering loans to startup companies (Nipun par .5). Furthermore, most trade, both international and domestic, survives on credit provided by commercial banks. Other commercial activities such as foreign exchange can only be possible with the help of a bank. Besides, most industries rely heavily on long term loans provided by banks. Other than financial support through loans, banks also function to provide advisory services to investors and industries. Banks and industries exhibit a mutual relationship whereby industries can susta...