Free exchange/ Economist As safe as houses Banks have been boosting mortgage lending for decades, at the expense of corporate loans Jan 31st 2015  |  From the print edition BANKS may be frail and dangerous things, but most economists see them as essential to growth. According to the centuries-old circular-flow model, which tries to explain how money moves between firms and households, it is their job to recycle private savings into business loans. That helps firms invest and grow. Places where spare cash is routinely stuffed under mattresses, in contrast, will tend to grow less fast. In practice, not all savings make their way into investment. For instance, as John Maynard Keynes pointed out in the 1930s, it is possible to have “savings gluts”—periods when households are more willing to save than firms are to borrow and invest. Ben Bernanke, a former chairman of the Federal Reserve,  has shown  that scarred banks curtail their lending to co...