This is from Martin Sandbu in the FT, just published:
Recall that the conventional story in which banks merely channel existing funds from savers to those with investments to finance is wrong. As the Bank of England has taken upon itself to explain to the public, banks create new money in the form of deposits when they issue loans. So the demand for loans is the practical constraint on credit and money growth. But credit availability itself fuels that demand: the more banks lend, the stronger the demand for loans — and banking profit being largely a matter of volume, profit-maximising banks will lend where the demand exists. This is why banking is an inherently unstable and destabilising activity.
But it also means that unequal access to credit is self-reinforcing. Profit-maximising banks will pour more lending into sectors or places that already have plenty of it, and stay away from those starved of credit. This is a market failure inherent to banking.
And that is why financial capitalism is not sustainable. Not now. And not ever.
But I am not convinced that means some other forms of capitalism within a mixed economy cannot be otherwise.