Outside the school setting what evidence do we actually have that the wizarding world is incompetent? [Not just operating self interestedly or on different values.]
The possibility of gold-silver arbitrage with the Muggle world and the lack of fractional-reserve banking.
I’m very sceptical since the beginning of gold-silver arbitrage with the Muggle, I’m pretty sure it’ll be forbidden under the Statue of Secrecy. Interaction with Muggles are not taken lightly. And since you’ve to go through a goblin bank to get your gold minted, you could hardly do it in a stealthy way.
I suspect galleons are actually a fiat currency controlled by the minstry/goblins, who keep a very close eye on the amounts of Gold in private hands and limit how many new Galleons can be minted.
Mostly, the Austrian response to that seems to be “Go ahead, but I’d never use them”. Apparently, full-reserve banks are a service people are willing to pay for. (And they do. They’re called “safety deposit boxes”.)
The possibility of gold-silver arbitrage with the Muggle world and the lack of fractional-reserve banking.
I’m very sceptical since the beginning of gold-silver arbitrage with the Muggle, I’m pretty sure it’ll be forbidden under the Statue of Secrecy. Interaction with Muggles are not taken lightly. And since you’ve to go through a goblin bank to get your gold minted, you could hardly do it in a stealthy way.
I suspect galleons are actually a fiat currency controlled by the minstry/goblins, who keep a very close eye on the amounts of Gold in private hands and limit how many new Galleons can be minted.
There’s folks in the Muggle world who think that fractional-reserve should be avoided like the plague, too. Perhaps goblins are all Austrian.
Wouldn’t this allow others to set up competing banks, or just competing lending agencies, and make good profits?
Mostly, the Austrian response to that seems to be “Go ahead, but I’d never use them”. Apparently, full-reserve banks are a service people are willing to pay for. (And they do. They’re called “safety deposit boxes”.)