In these times of financial turmoil, it seems to be imperative to encourage those who want to save the banks. This seems to be the message from the jury of the Bank of Sweden's Alfred Nobel Memorial Prize in Economic Sciences, often referred to as the Nobel Prize in Economics. The prestigious award is indeed given this year to Ben Bernanke, Douglas Diamond, and Philip Dybvig “for research on banks and financial crises.”

Even if these three 60-year-old Americans have an abundance of work to their credit, it is above all two articles, written 40 years ago, that have earned them the distinction.

Douglas Diamond, from the University of Chicago, and Philip Dybvig, from Washington University in St. Louis, have shown why banks are both precious and fragile.

Banks are valuable because they are at the heart of the “transformation”: they can lend long-term money to businesses from the short-term deposits of savers, leaving the possibility of recovering their money to those who need it. This also makes them fragile, because the model collapses if all the savers want to withdraw their money at the same time ("bank run", as in the case of the British bank Northern Rock in 2007).

Hence the usefulness of insurance mechanisms and deposit guarantees by governments. These reflections have justified several financial regulations that limit catastrophes.

Avoiding the worst

Ben Bernanke is much better known. He chaired the U.S. Federal Reserve, the world's most powerful central bank, during the most serious financial crisis in nearly a century. And if he helped avert the worst in 2008, it was because he had previously spent two decades at Princeton University deconstructing the crisis of the 1930s and then the 1990s in Japan.

In his 1983 article, Bernanke showed that the "bank runs" that led hundreds of banks to fail in the 1930s resulted in the loss of much information about the quality of borrowers, which reduced the efficiency of the financial system, raised the cost of credit, and prolonged the depression.

Hence the usefulness of coming to the rescue of distressed banks, a conclusion he learned in the 2008 crisis ... after failing to prevent the collapse of Lehman Brothers.

Double little boldness

With its 2022 prize list, the Bank of Sweden jury returns to a form of classicism by distinguishing three pure Americans (last year's winners were also Americans, but all three had a different nationality). It also returns to a traditional field, financial theory, distinguished in 2013 (with Eugene Fama and Robert Shiller among others) and twice in the 1990s.

But with Bernanke, the jury is making a double little bold move. It is the first time that a high-flying practitioner has been awarded. And it is also the first time that a laureate is affiliated at the time of the award with a think tank - the Brookings Institution in this case. For universities, this is a wake-up call.

This award to Ben Bernanke is also a symbol of a flawed system that cannot be fixed

Finally, for all those who have understood why the current monetary and financial system is flawed, seeing Ben Bernanke rewarded in this way is a new demonstration that this system cannot be fixed. Ben Bernanke was indeed awarded the Nobel Prize in Economics while he favored the financial crisis of 2008 of his bad decisions in terms of monetary policy.

A symbol that shows that the world needs a real revolution to get out of this outdated system. This peaceful revolution is embodied by the Bitcoin system. Some people say loud and clear that Satoshi Nakamoto should receive both the Nobel Prize in Economics and the Nobel Peace Prize for having designed the Bitcoin system.

It'll surprise you, but I don't think so.

Indeed, the Nobel Prize is a construction of the fiat system used to highlight the stakeholders of this system. Stakeholders do everything to protect the system. Satoshi Nakamoto has created an alternative decentralized system where nobody is more important than another. Everyone has the same weight in the Bitcoin world.

And that's a big difference. If you want to honor Satoshi Nakamoto, the best thing you can do is to run a Bitcoin node to reinforce this peaceful revolution that makes us believe that a better world for many is possible in the future.

Just the opposite of the achievements of Ben Bernanke and his American cronies.

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