Image by Stable Cascade
To this day, banking confuses many. The industry’s myriad of jargon and regulations can understandably perplex casual investors; however, they also confound experts—even those specializing in the discipline. Yet, banking is really quite simple. Banks borrow to lend. Their complexity is purely self-inflicted, created by the controls we’ve buried them under. Each new regulation adds to the burden bringing the industry one step closer to failure. The reflexive turn to regulatory solutions for industry hiccups reminds me of the old nursery rhyme: I don’t know why she swallowed a fly—perhaps she’ll die!
In 1952, Rose Bonne and Alan Mills copyrighted a song version of the children’s rhyme I Know an Old Lady. The familiar tune tells the silly story of an old woman who keeps swallowing animals. Beginning with a fly, the creatures successively grow larger. The woman hopes that her latest meal will catch the animal she previously ate. The behavior continues until the woman swallows a horse which kills her (of course!). As the story goes:
There was an old lady who swallowed a fly,
I don’t know why she swallowed a fly – perhaps she’ll die!
There was an old lady who swallowed a spider
That wriggled and jiggled and tickled inside her;
She swallowed the spider to catch the fly;
I don’t know why she swallowed a fly – perhaps she’ll die!
…
There was an old lady who swallowed a cow;
I don’t know how she swallowed a cow!
She swallowed the cow to catch the goat,
She swallowed the goat to catch the dog,
She swallowed the dog to catch the cat,
She swallowed the cat to catch the bird,
She swallowed the bird to catch the spider
That wriggled and jiggled and tickled inside her,
She swallowed the spider to catch the fly;
I don’t know why she swallowed a fly
