NMCR : National Average Capitalization Rate NPT : National Average Rate of Profit.
1. Central banks are not among the enterprises in question here.
On the other hand, any financial institution other than a central bank is included. The interest rates charged to their customers by financial institutions tend to regulate the interest charged by other enterprises to their own customers.
2. Suppose a financial institution whose outstanding loans are capped at the amount of its capital.
For this institution, the return on its capital can only be close to the TMNP">TMNP if the weighted average of the interest rates it charges is higher than the same TMNP">TMNP.
3. This financial institution participates in two ways in the increase of the TMNC.
One is the structure of its own financing; the other is because of the loans it grants to other enterprises, the relative high cost of these loans leading to a preference for capital increases.
4. This model reduces exposure to financial economic crises.
But it can only be generalized gradually, or even very gradually. Although the expansion of the financial industry, chronically faster than the growth of the rest of the economy, causes more harm than it provides benefits, too much remains thought and done as if this invasion were unstoppable.