> 1. The government requires banks buy their debt and hold it as reserves because it's considered the safest investment.
It's not just the banks either. In most Western countries, the pension funds are highly incentivised (usually through law) to purchase government debt in some form.
This is also part of the fuss on the ESG investment bill that Biden recently vetoed. The intent was to ensure that pension and fund managers were focused on their fiduciary obligation first and foremost, and any ESG, DIE, and SDG agendas secondly (or thirdly, or lastly).
Why do this? It's financial repression[1]. By channeling private funds into government debt or agenda-driven endeavours, it allows the government and those endeavours to borrow at much cheaper rates than they should be able to.
> The intent was to ensure that pension and fund managers were focused on their fiduciary obligation first and foremost
No, the intent was to make sure ESG and other factors could not be analyzed as a risk factor, when they plainly are risk factors, just inconvenient risk factors that oil lobbyists and the like would rather you didn't pay attention to. Biden did the right thing, and ensured pension/fund managers kept their independence.
It's not just the banks either. In most Western countries, the pension funds are highly incentivised (usually through law) to purchase government debt in some form.
This is also part of the fuss on the ESG investment bill that Biden recently vetoed. The intent was to ensure that pension and fund managers were focused on their fiduciary obligation first and foremost, and any ESG, DIE, and SDG agendas secondly (or thirdly, or lastly).
Why do this? It's financial repression[1]. By channeling private funds into government debt or agenda-driven endeavours, it allows the government and those endeavours to borrow at much cheaper rates than they should be able to.
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[1] https://www.investopedia.com/terms/f/financial-repression.as...