Money, Banks, and Creditworthiness Three Myths?
Money, Banks, and Creditworthiness Three Myths?
The chapter discusses three myths that underlie current conceptualizations of money, credit, and creditworthiness. The first --that money is fungible--describes it as a neutral means of accounting for value, and a quantitative metric to compare qualitatively different commodities. The myth of banks as institutions of intermediation defines them as organizations charged with the allocation and distribution of scarce financial resources (capital). Finally, the myth of creditworthiness as objective assessment understands the criteria by which borrowers are granted credit as a function of the traits of the borrower: the better these criteria capture such underlying traits, the better the odds that the financial obligation will be met in the future. Each of these myths ignores how money, credit, and creditworthiness are always contested, with certain bankers striving to reinforce the boundaries drawn around each phenomenon, while other bankers strive to transgress those boundaries.
Keywords: Money; Banking, Finance, Creditworthiness, Economic Theory, Sociology of Money
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