this post was submitted on 03 Jul 2023
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Simply, the central bank can play the role of a VC where people with great ideas apply for loans or grants.
You expect a bank to make high risk loans to unproven ideas? What about loans did things which are controversial (think dispensary or brewery)?
Yes, I expect the state bank to make loans for unproven ideas. This isn't nearly as outrageous as you seem to think. State funding in China is used precisely in this way to stimulate businesses in areas where China wants to advance right now. And if a dipensary or brewery was seen as socially necessary and viable they could get a loan like anybody else.