User:Andrewedwardjudd

2455: Page 7. Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by $ 9,000. Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the total deposits of the banking system. Page 37. In the real world, a bank's lending is not normally constrained by the amount of excess reserves it has at any given moment. Rather, loans are made, or not made, depending on the bank's credit policies and its expectations about its ability to obtain the funds necessary to pay its customers' checks and maintain required reserves in a timely fashion ...' 1222:

assumed (i) that a monetary policy tightening is effected by the central bank withdrawing reserves from the system (or slowing the pace of reserves injection); (ii) that banks are required to hold a proportion of transactions deposits in reserves, so that reduced reserves provision entails slower deposit growth; and (iii) that they do not have unrestricted access to liabilities that are not subject to reserves requirements, and so cannot fill the gap left by slower deposit growth and must, instead, slow loan growth, which they do by tightening credit conditions. The first two steps seem archaic. We effect monetary policy changes by controlling the price not the quantity of central bank money in the system; and, in the UK, banks choose their own reserves targets rather than having them determined by a balance sheet ratio of some kind."

823:

701:"In what follows we shall take heed of Hicks (1967, p. 153) who advised that “monetary theory… cannot avoid a relation to reality. It belongs to monetary history in a way that economic theory does not always belong to economic history.” Accordingly, this section reviews the evolution of monetary and financial institutions of the Western world and argues that the assumption of exogenous money and the multiplier model of the money-supply process constitute a largely accurate description of the financial system up to the first half of the twentieth century. However, modern institutional conditions, as well as the monetary policy framework in operation, are much better understood from the perspective of endogenous money view in the vein of the bank-centric model of money supply process." (Jablecki, J. page 38) 2623: This reflects .... the way risk is managed in a fractional-reserve banking system....Commercial banks....in the business of providing liquidity insurance to their customers – via deposits withdrawable on demand....are themselves inherently susceptible to liquidity crises. In consequence, customers want to be assured that banks can maintain convertibility into central bank money (notes).....the largest banks cannot buy liquidity insurance from each other without incurring an unacceptable level of (contingent) counterparty credit risk. They have to self insure, which they do by holding high-quality assets that can be exchanged at the central bank for 'cash' – or, rather, for a credit to their account at the central bank. ...' 658:"The economic literature....assumed (i) that a monetary policy tightening is effected by the central bank withdrawing reserves....(ii) that banks are required to hold a proportion of transactions deposits in reserves.... The first two steps seem archaic. We control....the price....of....central bank money....and, in the UK, banks choose their own reserves targets rather than having them determined by a balance sheet ratio of some kind....banks....in the short run....lever up their balance sheets and expand credit at will....banks extend credit by simply increasing the borrowing customer’s current account....banks extend credit by creating money" 86:

credit). These days most such accounts.....begin with a simple assertion that the central bank sets the short-term nominal interest rate. And they go on to explain how, given sticky wages and prices, that enables the central bank to shift the short-term real interest rate in a way that either restrains or stimulates aggregate demand. Notice no mention of money here. On this view of the world and, in particular, given this way of implementing monetary policy, money – both narrow and broad – is largely endogenous. The central bank simply supplies whatever amount of base money is demanded by the economy at the prevailing level of interest rates.'

1617:, an authority on central banking, worked for many years to encourage a different approach to money supply analysis and said the base money multiplier model was "such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction" Ten years later he said: "Almost all those who have worked in a believe that this view is totally mistaken; in particular, it ignores the implications of several of the crucial institutional features of a modern commercial banking system..." . Goodhart has characterized the money stock as a dependent endogenous variable. In 1994, 1849: Subject only but crucially to confidence in their soundness, banks extend credit by simply increasing the borrowing customer's current account, which can be paid away to wherever the borrower wants by the bank 'writing a cheque on itself'. That is, banks extend credit by creating money. This 'money creation' process is constrained by their need to manage the liquidity risk from the withdrawal of deposits and the drawdown of backup lines to which it exposes them. Adequate capital and liquidity, including for stressed circumstances, are the essential ingredients for maintaining confidence ...' 233: Subject only but crucially to confidence in their soundness, banks extend credit by simply increasing the borrowing customer's current account, which can be paid away to wherever the borrower wants by the bank 'writing a cheque on itself'. That is, banks extend credit by creating money. This 'money creation' process is constrained by their need to manage the liquidity risk from the withdrawal of deposits and the drawdown of backup lines to which it exposes them. Adequate capital and liquidity, including for stressed circumstances, are the essential ingredients for maintaining confidence ...' 758:, an economist and formerly an advisor at the Bank of England and a former monetary policy committee member, worked for many years to encourage a different approach to money supply analysis and said the base money multiplier model was 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction' Ten years later he said ‘Almost all those who have worked in a believe that this view is totally mistaken; in particular, it ignores the implications of several of the crucial institutional features of a modern commercial banking system....’ 82:, an economist and formerly an advisor at the Bank of England and a former monetary policy committee member, worked for many years to encourage a different approach to money supply analysis and said the base money multiplier model was 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction' Ten years later he said ‘Almost all those who have worked in a believe that this view is totally mistaken; in particular, it ignores the implications of several of the crucial institutional features of a modern commercial banking system....’ 793:

short-term nominal interest rate. And they go on to explain how, given sticky wages and prices, that enables the central bank to shift the short-term real interest rate in a way that either restrains or stimulates aggregate demand. Notice no mention of money here. On this view of the world and, in particular, given this way of implementing monetary policy, money – both narrow and broad – is largely endogenous. The central bank simply supplies whatever amount of base money is demanded by the economy at the prevailing level of interest rates".

2603: Banks are dangerous institutions. They borrow short and lend long. They create liabilities which promise to be liquid and hold few liquid assets themselves. That though is hugely valuable for the rest of the economy. Household savings can be channelled to finance illiquid investment projects while providing access to liquidity for those savers who may need it.... If a large number of depositors want liquidity at the same time, banks are forced into early liquidation of assets – lowering their value ...' 140:

account, which can be paid away to wherever the borrower wants by the bank ‘writing a cheque on itself’. That is, banks extend credit by creating money. This ‘money creation’ process is constrained: by their need to manage the liquidity risk – from the withdrawal of deposits and the drawdown of backup lines – to which it exposes them. 15 Adequate capital and liquidity, including for stressed circumstances, are the essential ingredients for maintaining confidence. (Tucker, Paul. 2007.12.03 pages 9-10).

2643: Commercial banks ....are inherently exposed to liquidity risk – the risk that a bank is unable to meet its commitments should depositors attempt to withdraw their funds ahead of the bank's capacity to repay them....There is, however, one last line of defence left. A bank holding a buffer of reliable high quality liquid assets, such as Treasury bills or other government securities, can draw on them immediately and directly in the event of a sudden withdrawal of market liquidity.' 715:"Of course, they do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by $ 9,000. Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the total deposits of the banking system." 1236:

can be paid away to wherever the borrower wants by the bank ‘writing a cheque on itself’. That is, banks extend credit by creating money. This ‘money creation’ process is constrained: by their need to manage the liquidity risk – from the withdrawal of deposits and the drawdown of backup lines – to which it exposes them. Adequate capital and liquidity, including for stressed circumstances, are the essential ingredients for maintaining confidence."

837:

2559: banks....in the short run.....lever up their balance sheets and expand credit at will....Subject only but crucially to confidence in their soundness, banks extend credit by simply increasing the borrowing customer's current account.....This 'money creation' process is constrained by their need to manage the liquidity risk from the withdrawal of deposits and the drawdown of backup lines to which it exposes them. 22: 1266:....banks....in the short run,....lever up their balance sheets and expand credit at will....banks extend credit by simply increasing the borrowing customer’s current account....banks extend credit by creating money. This ‘money creation’ process is constrained: by their need to manage the liquidity risk – from the withdrawal of deposits and the drawdown of backup lines – to which it exposes them." 752:

of a ‘pure’ monetary expansion, or its supply is altered by open-market operations. In the United Kingdom, money is endogenous - the Bank supplies base money on demand at its prevailing interest rate, and broad money is created by the banking system. Therefore the endogeneity of money has caused great confusion, and led some critics to argue that money is unimportant. This is a serious mistake'

98:

exogenously imposed changes in the money stock which transmits itself to changes in demand (and then possibly output but more usually the price level) by some version of ‘real balance effects’. This is wholly at odds with our everyday knowledge of the policy instrument and with what central banks widely believe is the transmission of monetary policy effects (Howells P et al 2006 page 3).

324: money multiplier, as an introduction to the theory of fractional reserve banking. I suppose students have to learn that, and it is easy to teach, but most practitioners find it to be a pretty unsatisfactory description of how the monetary and credit system actually works. In large part, this is because it ignores the role of financial prices in the process ...' 253: In the real world, a bank's lending is not normally constrained by the amount of excess reserves it has at any given moment. Rather, loans are made, or not made, depending on the bank's credit policies and its expectations about its ability to obtain the funds necessary to pay its customers' checks and maintain required reserves in a timely fashion ...' 2185: money multiplier, as an introduction to the theory of fractional reserve banking. I suppose students have to learn that, and it is easy to teach, but most practitioners find it to be a pretty unsatisfactory description of how the monetary and credit system actually works. In large part, this is because it ignores the role of financial prices in the process. 1798: money multiplier, as an introduction to the theory of fractional reserve banking. I suppose students have to learn that, and it is easy to teach, but most practitioners find it to be a pretty unsatisfactory description of how the monetary and credit system actually works. In large part, this is because it ignores the role of financial prices in the process. 1089: money multiplier, as an introduction to the theory of fractional reserve banking. I suppose students have to learn that, and it is easy to teach, but most practitioners find it to be a pretty unsatisfactory description of how the monetary and credit system actually works. In large part, this is because it ignores the role of financial prices in the process. 881: money multiplier, as an introduction to the theory of fractional reserve banking. I suppose students have to learn that, and it is easy to teach, but most practitioners find it to be a pretty unsatisfactory description of how the monetary and credit system actually works. In large part, this is because it ignores the role of financial prices in the process. 1538:

supply is altered by open-market operations. In the United Kingdom, money is endogenous - the Bank supplies base money on demand at its prevailing interest rate, and broad money is created by the banking system. Therefore the endogeneity of money has caused great confusion, and led some critics to argue that money is unimportant. This is a serious mistake'

721:"In the real world, a bank's lending is not normally constrained by the amount of excess reserves it has at any given moment. Rather, loans are made, or not made, depending on the bank's credit policies and its expectations about its ability to obtain the funds necessary to pay its customers' checks and maintain required reserves in a timely fashion" 1517:

Goodhart said, " Central Bank sets interest rates, as is the generality, the money stock is a dependent, endogenous variable. This is exactly what the heterodox, Post-Keynesians, from Kaldor, through Vicky Chick, and on through Basil Moore and Randy Wray, have been correctly claiming for decades, and I have been in their party on this."

2051: the Federal Reserve Banks can extend credit to most Fedwire Funds Service participants lacking sufficient balances to cover their payment instructions. This exposes the Federal Reserve Banks to risk of loss. To limit exposure, the Federal Reserve Banks have adopted a comprehensive daylight overdraft control policy ...' 1976: the Federal Reserve Banks can extend credit to most Fedwire Funds Service participants lacking sufficient balances to cover their payment instructions. This exposes the Federal Reserve Banks to risk of loss. To limit exposure, the Federal Reserve Banks have adopted a comprehensive daylight overdraft control policy ...' 2435: In the real world, banks extend credit, creating deposits in the process, and look for reserves later. The question then becomes one of whether and how the Federal Reserve will accommodate the demand for reserves. In the very short run, the Federal Reserve has little or no choice about accommodating that demand… ...' 1781: In the real world, banks extend credit, creating deposits in the process, and look for reserves later. The question then becomes one of whether and how the Federal Reserve will accommodate the demand for reserves. In the very short run, the Federal Reserve has little or no choice about accommodating that demand… ...' 2291: The base-multiplier model of money supply determination (which lies behind the exogenously determined money stock of the LM curve) was condemned years ago as 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction ...'(Goodhart 1984. Page 188) 1939: The base-multiplier model of money supply determination (which lies behind the exogenously determined money stock of the LM curve) was condemned years ago as 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction ...'(Goodhart 1984. Page 188) 1109: The base-multiplier model of money supply determination (which lies behind the exogenously determined money stock of the LM curve) was condemned years ago as 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction ...'(Goodhart 1984. Page 188) 901: The base-multiplier model of money supply determination (which lies behind the exogenously determined money stock of the LM curve) was condemned years ago as 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction ...'(Goodhart 1984. Page 188) 273: The base-multiplier model of money supply determination (which lies behind the exogenously determined money stock of the LM curve) was condemned years ago as 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction ...'(Goodhart 1984. Page 188) 1257:

reduced reserves provision entails slower deposit growth; and iii.....The first two steps seem archaic. We ....control.... the price not the quantity of central bank money in the system; and, in the UK, banks choose their own reserves targets rather than having them determined by a balance sheet ratio of some kind."

2304:"Goodhart C. (1994), What Should Central Banks Do? What Should Be Their Macroeconomic objectives and Operations?, The Economic Journal, 104, 1424–1436 I have not seen, cited in "Show me the money" – or how the institutional aspects of monetary policy implementation render money supply endogenous. Juliusz Jablecki" 1952:"Goodhart C. (1994), What Should Central Banks Do? What Should Be Their Macroeconomic objectives and Operations?, The Economic Journal, 104, 1424–1436 I have not seen, cited in "Show me the money" – or how the institutional aspects of monetary policy implementation render money supply endogenous. Juliusz Jablecki" 1122:"Goodhart C. (1994), What Should Central Banks Do? What Should Be Their Macroeconomic objectives and Operations?, The Economic Journal, 104, 1424–1436 I have not seen, cited in "Show me the money" – or how the institutional aspects of monetary policy implementation render money supply endogenous. Juliusz Jablecki" 286:"Goodhart C. (1994), What Should Central Banks Do? What Should Be Their Macroeconomic objectives and Operations?, The Economic Journal, 104, 1424–1436 I have not seen, cited in "Show me the money" – or how the institutional aspects of monetary policy implementation render money supply endogenous. Juliusz Jabłecki" 1445:

I request, merely in case it needs to be made known, to please not say or do anything that makes it seem like a person is "hostile" when obviously a person is not. We are trying to solve something. That is the only goal that matters. In the event that the sent request to join talks fails, this may be

1235:

As transactions balances and so the means of exchange in our payments system, the moneyness of bank deposits lies at the core of credit intermediation. Subject only but crucially to confidence in their soundness, banks extend credit by simply increasing the borrowing customer’s current account, which

836:

799:

Charles Goodhart said in 2007, " Central Bank sets interest rates, as is the generality, the money stock is a dependent, endogenous variable. This is exactly what the heterodox, Post- Keynesians, from Kaldor, through Vicky Chick, and on through Basil Moore and Randy Wray, have been correctly claiming

139:

money and because transactions balances and so the means of exchange in our payments system, the moneyness of bank deposits lies at the core of credit intermediation. Subject only but crucially to confidence in their soundness, banks extend credit by simply increasing the borrowing customer’s current

106:

1516:

Also, the idea that the reserve requirement places an upper limit on the money supply is disputed by some economists, including for example the former chief economist of the Bank of England and current Governor, Mervyn King, and the UK's foremost central banking economist Charles Goodhart. In 2007,

1489:

A number of highly respected central bankers and monetary economists believe the money multiplier is a very unsatisfactory way of describing how credit is created in the real world, mainly because it ignores the influences of prices, and the way that modern central banking manages the money supply.

1231:

Well, much that I have said about banks – their capacity, in the short run, to lever up their balance sheets and expand credit at will; their role in providing liquidity insurance to investment vehicles and corporates – turns precisely on their liabilities being money. And for this reason, banks are

832:

704:

Alan Holmes, who was at the time a Senior Vice President of the Federal Reserve Bank of New York responsible for open market operations wrote in the 1960's "In the real world, banks extend credit, creating deposits in the process, and look for reserves later. The question then becomes one of whether

93:

Note however, it is clear that loans create money and a money multiplier exists related to lending. The issue being addressed however is that money creation is chaotic and cannot be modeled using simple mechanical views of lending only created from existing deposits because banks essentially do not

1541:

Goodhart, formerly an advisor at the Bank of England and a former monetary policy committee member, worked for many years to encourage a different approach to money supply analysis and said the base money multiplier model was 'such an incomplete way of describing the process of the determination of

751:

In 1994 Mervyn King then Chief Economist at the Bank of England said 'One of the most contentious issues in assessing the role of money is the direction of causation between money and demand. Textbooks assume that money is exogenous. It is sometimes dropped by helicopters, as in Friedman’s analysis

592:

Loans tend to lead to reserve creation. This is explainable because, since about 1992, the central banks are supplying reserves on demand to keep the money market cash rate at the desired target rate. Therefore if the banking system is short of reserves due to deposit expansion, the central bank

71:

2475:

Page 2. the concept of the money multiplier is flawed and uninformative in terms of analyzing the dynamics of bank lending. Page 7 When a loan is granted, banks in the first instance create a new liability that is issued to the borrower. This can be in the form of deposits or a cheque drawn on the

1562:

In practice, Banks creating large value loans can borrow the loan money in real time by systems operated by major central banks, where it is established practice the central banks will support the payments systems during the day, via overdraft or repurchase agreement.. Endogenous money proponents

571:

In an exogenous view of money multiplication, a bank lends depositors money as "excess reserves" and this fraction of the depositors money then becomes the source for new money in the banking system. For example 100 is deposited, 10% is retained as "required reserves", and 90 "excess reserves are

85:

13 years after Mervyn Kings observations on 'contentious issues' between Exogenous and Endogenous money, Deputy governor Paul Tucker was able to say ”When, ten years ago, Mervyn King delivered a lecture...., he reviewed ideas on the monetary transmission mechanism....... and the role of money (and

2202:

Some decades ago, the academic literature....emphasised the importance of the reserves supplied by the central bank....., and the implications (via the money multiplier) for the growth of money and credit. Today, it is more broadly understood that no industrial country conducts policy in this way

1686:

I noticed that "backed by" has been changed to "kept as". I think this has the same unclarity that "backed by" has. What about saying that "only a fraction of deposits can be withdrawn on-demand" with the possible qualification "even though all deposits are promised to be withdrawable on-demand".

1221:

The economic literature on the ‘bank lending’ channel of the Monetary Transmission Mechanism explores the conditions under which a tightening of monetary policy causes the terms on bank lending to tighten over and above the increase in risk-free short-term real rates. The literature has typically

822:

708:

Also from the 1960's a work book on bank reserves and deposit expansion from the Federal Reserve Bank of Chicago explains in the opening paragraph "The relationships shown are based on simplifying assumptions. For the sake of simplicity, the relationships are shown as if they were mechanical, but

531:

115:

1542:

the stock of money that it amounts to misinstruction' Ten years later he said ‘Almost all those who have worked in a believe that this view is totally mistaken; in particular, it ignores the implications of several of the crucial institutional features of a modern commercial banking system....’

1508:

In practice, rather than lending available "excess reserves" as a customer lending policy, as described in the base money multiplier model, banks tend to lend their "excess reserves" to other financial institutions - often on an overnight basis, so that they have these deposits available earning

1493:

From about 1991 a remarkable consensus had emerged within developed economies about the optimum design of monetary policy methods. In essence central bankers gave up attempts to directly control the amount of money in the economy and instead moved to indirect methods by targeting interest rates.

1256:

The economic literature....has typically assumed (i) that a monetary policy tightening is effected by the central bank withdrawing reserves from the system (or slowing the pace of reserves injection); (ii) that banks are required to hold a proportion of transactions deposits in reserves, so that

130:

The first two steps seem archaic. The BOE effect monetary policy changes by controlling the price not the quantity of central bank money in the system; and, in the UK, banks choose their own reserves targets rather than having them determined by a balance sheet ratio of some kind. (Tucker, Paul.

97:

However notwithstanding all of the above, dispite the apparent consensus at the BOE and other central banks, twenty five years after the switch to short-term interest rates, macroeconomic instruction at the textbook level still requires students to learn that monetary policy consists (solely) of

1537:

In 1994, Mervyn King said 'One of the most contentious issues in assessing the role of money is the direction of causation between money and demand. Textbooks assume that money is exogenous. It is sometimes dropped by helicopters, as in Friedman’s analysis of a ‘pure’ monetary expansion, or its

369:

Elements of Banking Made Simple, Hoyle and Whitehead (Oxford: Heinemann, 1989 edition). From preface "specifically designed to meet the requirements of the Institute of Bankers’ Banking Certificate and Foundation Course". Page 22 "Consider a deposit....£1000 in banknotes....(a) We can lend out

75:

One of the reasons money is endogenous is because banks create credit rather than lending existing money. Therefore if the central bank in turn has a policy of supplying money on demand at a price, then the broad money supply can keep rising. However, the creation of central bank money actually

2570:

Charles Goodhart, 2010. Money, Credit and Bank Behaviour: Need for a new approach. "The standard approach, in teaching and textbooks....that centred around the money multiplier...should be discarded immediately. The practical realities, whereby the central bank and the commercial bank set the

2223:

It used to be that most academic research treated money (or sometimes base) as the exogenous policy instrument under the control of the central bank. This was an irritant to those of us working in central banks, because the instrument of policy had always been the short-term interest rate, and

1545:

Because of these modern banking systems, banks are not truelly lending existing central bank money, but are instead creating money while managing the liabilities this creates for them by having lines of credit, and access to a highly liquid money market - at rates near to those targeted by the

430:

1299:

For this model, if a bank has 100 reserves and 100 customer deposits the bank can only create 90 in new loans with a single loan. According to this model, if a customer wanted a loan of 171 credited to their current account, then two loans would have to be done as follows for a bank using a

792:

In 2004 Paul Tucker at the BOE wrote, "When, ten years ago, Mervyn King delivered a lecture...., he reviewed ideas on the monetary transmission mechanism....... and the role of money (and credit). These days most such accounts.....begin with a simple assertion that the central bank sets the

64:

From about 1991 a remarkable consensus had emerged within developed economies about the optimum design of monetary policy methods. Simplifying somewhat, we could say that the early 1980s saw the final demise of attempts to control the quantities of money (and/or credit) by any direct method

2203:

under normal circumstances....there has been a decisive shift towards the use of short-term interest rates as the policy instrument . In this framework, cash reserves supplied to the banking system are whatever they have to be to ensure that the desired policy rate is in fact achieved.

611:

618:, an economist and formerly an advisor at the Bank of England and a former monetary policy committee member, said the base money multiplier model was 'such an incomplete way of describing the process of the determination of the stock of money that it amounts to misinstruction' 2224:

because all monetary aggregates (beyond base) have always been and remain endogenous. In recent years, more and more academics, in specifying their models, have treated the short-term interest rate as the policy instrument, thereby increasing the usefulness of their analyses...

431:

76:

happened after money creation by the commercial banks (King 1994 Page 264). King continues, 'Therefore the endogeneity of money has caused great confusion, and led some critics to argue that money is unimportant. This is a serious mistake' (King 1994, Page 264).

89:

Therefore many Central bankers and monetary economists now believe money creation in banking systems is endogenously created and deposit multiplication by the text book money multiplier is an unsatisfactory teaching tool and explanation of the what really happens.

2517:

Required reserves have traditionally been justified by a desire to influence the size of the money multiplier and by prudential concerns. However, central banks' views about money supply determination have for a long time been that the money stock is demand

472:

370:£700.... This is the simple view of bank lending. (b) It is....possible for us to have deposits of £3333.33. As we only have deposits....of £1000 we can lend out £2333.33, provided we can find borrowers. This is the more sophisticated view of bank lending. 72:

126:(iii) that they do not have unrestricted access to liabilities that are not subject to reserves requirements, and so cannot fill the gap left by slower deposit growth and must, instead, slow loan growth, which they do by tightening credit conditions. 575:

However there is no requirement for a bank to operate in that manner. In practice, a 10% fractional reserve bank with 10,000 reserves and 100,000 created customer deposits, can comfortably deposit a loan of 1000 into a customers current account

549:

there has been a decisive shift towards the use of short-term interest rates as the policy instrument . In this framework, cash reserves supplied to the banking system are whatever they have to be to ensure that the desired policy rate is in fact

2362: given this way of implementing monetary policy, money – both narrow and broad – is largely endogenous. The central bank simply supplies whatever amount of base money is demanded by the economy at the prevailing level of interest rates. 1512:

Seth B. Carpenter, a monetary policy and financial markets researcher at the Board of Governors of the Federal Reserve System and Selva Demiralp concluded the simple textbook base money multiplier is implausible in the United States.

2476:

bank, which when redeemed, becomes deposits at another bank. A well functioning interbank market overcomes the asynchronous nature of loan and deposit creation across banks. Thus loans drive deposits rather than the other way around.

2428:"(Holmes, 1969 page 73 at the time Senior Vice President of the Federal Reserve Bank of New York responsible for open market operations) I have not seen, cited in Bank and Credit the Scientific Journal of the National Bank of Poland" 1774:"(Holmes, 1969 page 73 at the time Senior Vice President of the Federal Reserve Bank of New York responsible for open market operations) I have not seen, cited in Bank and Credit the Scientific Journal of the National Bank of Poland" 998:"(Holmes, 1969 page 73 at the time Senior Vice President of the Federal Reserve Bank of New York responsible for open market operations) I have not seen, cited in Bank and Credit the Scientific Journal of the National Bank of Poland" 1289:

2. a credit model where deposits are created from loans when customers request loans and the liabilities this creates are then managed by the bank - using other currently available on demand money systems, as per Tuckers comments

1504:

Therefore banks do not as a policy 'lend their customers money' but rather as a policy 'they lever, their balance sheet' by creating commercial bank money, while simultaneously managing the liquidity risk this creates for them.

603:

Demand for loans from creditworthy customers becomes the driving force for deposit expansion. If a customer wants a loan, the bank can price the loan, and then borrow whatever amounts are required to maintain their fractional

1303:

Note: At stage a) The bank is required to retain 10 reserves to back 100 newly created deposit money and at stage b) it is required to retain another 9 reserves, and then at stage c) it needs to retain another 8.1 reserves

134:

Where does this leave base Money, the starting point for much traditional monetary analysis? The BOE explain that banks, in the short run, lever up their balance sheets and expand credit at will - there liabilities

1610:

Though not a mainstream economic belief, a number of central bankers and monetary economists believe the money multiplier or relending model, is a very unrealistic way of describing how banking works in practice.

2571:

interest rates at which they will operate, and then the various agents in the private sector and amongst the banks determine monetary quantities endogenously, is more complex but has the advantage of realism"

772:

Secondly, the monetary policy instruments used by central banks for some years now, are based on short term interest rates set by the central bank, not the quantity of base money. The base multiplier model

632:

388:

the process actually works in reverse, with loans driving deposits. In particular, it is argued that the concept of the money multiplier is flawed and uninformative in terms of analyzing the dynamics of bank

709:

they are not, as is described later in the booklet. Thus, they should not be interpreted to imply a close and predictable relationship between a specific central bank transaction and the quantity of money"

840:"Hence the appearance of the balance sheet: many small short term deposits matching fewer, larger long term loans. But deposits do not cause the loans, rather loans create deposits" Howells book page 33 788:

then supply the reserves the banks require and this will depend on the demand for loans at the going rate of interest. Therefore the money supply is determined by the economy rather than the central bank.

648:

1721:

The important point being that customer deposits inside the bank are IOU money and a fraction of the customers existing deposits is not kept as reserves which is outside money. They are different monies.

1554:, whatever additional Central bank money necessary to achieve a banking system balance, at the prevailing central bank policy rate, is supplied on demand, at a price, by the central banks (King 1994). 928:"Howells and Bain (2005) I have not seen, cited in "Show me the money" – or how the institutional aspects of monetary policy implementation render money supply endogenous. Juliusz Jablecki. Page 37" 1363:

Note: at stage a) (as for the relending model) The bank is required to retain 10 reserves to back 100 newly created deposit money and at stage b) it is required to retain another 17.1 reserves

2284:"Goodhart C A E (1984( Monetary Policy in Theory and Practice p.188. I have not seen, cited in Monetary Policy Regimes: a fragile consensus. Peter Howells and Iris Biefang-Frisancho Mariscal" 1932:"Goodhart C A E (1984( Monetary Policy in Theory and Practice p.188. I have not seen, cited in Monetary Policy Regimes: a fragile consensus. Peter Howells and Iris Biefang-Frisancho Mariscal" 1102:"Goodhart C A E (1984( Monetary Policy in Theory and Practice p.188. I have not seen, cited in Monetary Policy Regimes: a fragile consensus. Peter Howells and Iris Biefang-Frisancho Mariscal" 894:"Goodhart C A E (1984( Monetary Policy in Theory and Practice p.188. I have not seen, cited in Monetary Policy Regimes: a fragile consensus. Peter Howells and Iris Biefang-Frisancho Mariscal" 266:"Goodhart C A E (1984( Monetary Policy in Theory and Practice p.188. I have not seen, cited in Monetary Policy Regimes: a fragile consensus. Peter Howells and Iris Biefang-Frisancho Mariscal" 2269: 1827: 1279:

In the discussion so far we have only considered a credit model of lending where loans demanded by customers leads to central bank money being created as required for the commercial banks.

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The relending model mainly focuses on cash/Gold loans rather than bank credit. The relending model is, as Tucker put it, archaic in the context of modern banking systems and practices.

1469:

If the requesting party "Andrewedwardjudd" (who also would like solve the problem) is making it difficult, and the problem comes to no resolution, then the case will simply be closed.

1607:. Endogenous money theory states that the supply of money is credit-driven and determined endogenously by the demand for bank loans, rather than exogenously by monetary authorities. 1534:. Endogenous money theory states that the supply of money is credit-driven and determined endogenously by the demand for bank loans, rather than exogenously by monetary authorities. 748:. Endogenous money theory states that the supply of money is credit-driven and determined endogenously by the demand for bank loans, rather than exogenously by monetary authorities. 692:. Endogenous money theory states that the supply of money is credit-driven and determined endogenously by the demand for bank loans, rather than exogenously by monetary authorities. 568:

Endogenous money theory states that the supply of money is credit-driven and determined endogenously by the demand for bank loans, rather than exogenously by monetary authorities.

796:

Howells and Bain (2005) have managed to incorporate the main points of the endogenous view on the money-supply process into a macroeconomics textbook. (Jablecki, J. page 37)

705:

and how the Federal Reserve will accommodate the demand for reserves. In the very short run, the Federal Reserve has little or no choice about accommodating that demand"

1635:

A number of central bankers and economists propose that, rather than deposits leading to loans, causality is reversed, and loans lead to deposits. (Howells P, Page 33)

2778: 1550:, but deposits do not create loans but rather demand for loans creates deposits. After a loan is demanded, and existing sources of central bank money are sought, 1501:

new deposits are causing loans to be created, in reality banks create credit so that new loans create new deposits in the banking system. (Howells P. Page 33)

1717:) for expected customer withdrawals.The bank lends out some or most of the deposited funds, while still allowing each customer to make withdrawals on demand. 123:(ii) that banks are required to hold a proportion of transactions deposits in reserves, so that reduced reserves provision entails slower deposit growth; and 1574:

Third, it is well established that the short-term monetary interest rate is the instrument of monetary policy and not any quantitative monetary variable.

2259:

Understanding the Remarkable Survival of Multiplier Models of Money Stock Determination. Eastern Economic Journal, 1992, vol. 18, issue 3, pages 305-314

1875:

Understanding the Remarkable Survival of Multiplier Models of Money Stock Determination. Eastern Economic Journal, 1992, vol. 18, issue 3, pages 305-314

1045:

Understanding the Remarkable Survival of Multiplier Models of Money Stock Determination. Eastern Economic Journal, 1992, vol. 18, issue 3, pages 305-314

975:

Understanding the Remarkable Survival of Multiplier Models of Money Stock Determination. Eastern Economic Journal, 1992, vol. 18, issue 3, pages 305-314

120:(i) that a monetary policy tightening is effected by the central bank withdrawing reserves from the system (or slowing the pace of reserves injection); 1546:

central bank. It is true the banks are continually getting deposits of central bank money, and they are most certainly paying out central bank money

1671:) available for withdrawal.The bank lends out some or most of the deposited funds, while still allowing all deposits to be withdrawn upon demand. 29: 2031: The central bank simply supplies whatever amount of base money is demanded by the economy at the prevailing level of interest rates. 652:

Howells has managed to incorporate the main points of the endogenous view on the money-supply process into a macroeconomics textbook.

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then argue the banks can borrow whatever they need to settle with the central bank from the money market before the end of the day.

1457: 1632:

Seth B. Carpenter and Selva Demiralp concluded the simple textbook base money multiplier is implausible in the United States.

1462:

Is this really how wiki operates? The mediation editor gets created after i ask for help and then writes this to each side

153:

The single monetary policy in the euro area: General documentation on Eurosystem monetary policy instruments and procedures

50:

The single monetary policy in the euro area: General documentation on Eurosystem monetary policy instruments and procedures

2098: 1681: 2320: 1885: 1169: 587:

Rather than lending customer money, the banks are extending credit and then managing the liabilities this creates for them

336: 1481:

Evidently this is just another childish game to obfuscate and waste peoples time when the objective is no change at all.

2728: 2669: 2270:"The economics of money, banking and finance: a European text. Fourth edition. Howells, P. G. A. Baines, K. Page 241" 730:

Also, the idea that the reserve requirement places an upper limit on the money supply is disputed by some economists

674:

Also, the idea that the reserve requirement places an upper limit on the money supply is disputed by some economists

1139:"The economics of money, banking and finance: a European text. Fourth edition. P. G. A. Howells,Keith Bain Page 241" 914:"The economics of money, banking and finance: a European text. Fourth edition. P. G. A. Howells,Keith Bain Page 241" 2043: 1968: 94:

loan out deposits, but rather create credit and then manage the liabilities this creates for them. (Tucker 2007).

1477:

Hi, please not say or do anything that makes it seem like a person is "hostile" when obviously a person is not.

2721: 2662: 2636:"Nigel Jenkinson, Strengthening Regimes for Controlling Liquidity Risk: Some Lessons from the Recent Turmoil" 1458:

Neutral Mediator helps Wonderful people, obviously not hostile, and difficult andrewedwardjudd solve problem.

2256: 1872: 1042: 972: 2337: 1914: 1828:"The economics of money, banking and finance: a European text. Fourth edition. P. G. A. Howells. Baines, K" 1067: 859: 665: 208: 2635: 2615: 2595: 2551: 2354: 2023: 1841: 1756: 1739: 1186: 1152: 944: 353: 302: 225: 2616:"Paul Tucker, Managing the central bank's balance sheet: Where monetary policy meets financial stability" 2355:"Paul Tucker, Managing the central bank's balance sheet: Where monetary policy meets financial stability" 2024:"Paul Tucker, Managing the central bank's balance sheet: Where monetary policy meets financial stability" 1153:"Paul Tucker, Managing the central bank's balance sheet: Where monetary policy meets financial stability" 727:

Seth B. Carpenter and Selva Demiralp have written of their skepticism of the money multiplier mechanism.

671:

Seth B. Carpenter and Selva Demiralp have written of their skepticism of the money multiplier mechanism.

303:"Paul Tucker, Managing the central bank's balance sheet: Where monetary policy meets financial stability" 2063: 1988: 1811:"Monetary Policy Regimes: a fragile consensus, Peter Howells and Iris Biefang-Frisancho Mariscal (2006)" 1725:

that Flash Video software or a web browser supporting H.264/MPEG-4 AVC is necessary to see the content.

1207:

In 2007 Paul Tucker(Tucker, outlined some of the practical implications of endogenous money in the UK.

697:

Money exo- and endogeneity in the evolution of financial institutions and monetary policy implementation

192:"Monetary Policy Regimes: a fragile consensus, Peter Howells and Iris Biefang-Frisancho Mariscal (2006)" 1682:

http://en.wikipedia.org/search/?title=Fractional-reserve_banking&diff=394905000&oldid=394658401

843:

Banks with surplus "excess reserves" loan those reserves to other financial institutions - howells P36

2417:

Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist? Conclusions

1863:

Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist? Conclusions

2154: 2119: 2084: 2009: 1242:

In 2007 Paul Tucker, outlined some of the practical implications of endogenous money on UK banking.

2761: 2702: 1263:"Where does this leave money (or Money), the starting point for much traditional monetary analysis? 1228:"Where does this leave money (or Money), the starting point for much traditional monetary analysis? 829:"Where does this leave money (or Money), the starting point for much traditional monetary analysis? 2750: 2691: 2427: 2303: 1951: 1773: 1121: 997: 927: 285: 2447: 2414: 1860: 1030: 1014: 960: 245: 1618: 1509:

interest, while still being available to meet customer withdrawal requests. (Howells P, Page 36)

808:

In 2007 Paul Tucker, outlined some of the practical implications of endogenous money in the UK.

655:

In 2007 Paul Tucker, outlined some of the practical implications of endogenous money in the UK.

2537: 2495: 2381: 2243: 2215: 1424: 492: 450: 422: 408: 598:

The base money multiplier is considered to be a misleading way of describing how banks operate.

593:

is obliged to supply sufficent money to keep the money market interest rate at the target rate.

1621:

said that the causation between money and demand is a contentious issue. He notes that in the

2395: 1692: 1429: 506: 1434: 148: 45: 1033:

Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist?

963:

Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist?

8: 2180: 2133: 1793: 1084: 876: 731: 675: 319: 1213:"All this brings back into focus the potential macroeconomic relevance of bank lending. 814:"All this brings back into focus the potential macroeconomic relevance of bank lending. 2198:"White, W. Changing views on how best to conduct monetary policy: the last fifty years" 1451: 545:"White, W. Changing views on how best to conduct monetary policy: the last fifty years" 527:"White, W. Changing views on how best to conduct monetary policy: the last fifty years" 1705:

is the banking practice in which only a fraction of the total money value of customer

1439: 2724: 2717: 2665: 2658: 2524: 2482: 2368: 2230: 2141: 2106: 2071: 1996: 1600: 1527: 741: 685: 479: 437: 395: 2167:

A handbook of alternative monetary economics, by Philip Arestis, Malcolm C. Sawyer,

1901:

A handbook of alternative monetary economics, by Philip Arestis, Malcolm C. Sawyer,

1248:"this brings back into focus the potential macroeconomic relevance of bank lending. 1054:

A handbook of alternative monetary economics, by Philip Arestis, Malcolm C. Sawyer,

984:

A handbook of alternative monetary economics, by Philip Arestis, Malcolm C. Sawyer,

2739: 2680: 1688: 1614: 1595: 1588: 1522: 755: 736: 680: 615: 79: 56: 1626: 1629:

provides base money on demand and broad money is created by the banking system.

2509: 1622: 1604: 1531: 745: 689: 464: 2714:

The Bank Credit Analysis Handbook: A Guide for Analysts, Bankers and Investors

2655:

The Bank Credit Analysis Handbook: A Guide for Analysts, Bankers and Investors

2581: 1425:

http://en.wikipedia.org/User_talk:Lawrencekhoo#Hi_Wonderful_Person.21.21.5E.5E

2772: 1714: 1710: 1668: 1664: 1447: 1678:

Back in November 2010 a few people were working towards improving the text.

765:

Firstly the base money multiplier contains a number of assumptions that are

625:

Firstly the base money multiplier contains a number of assumptions that are

156:

The daily reserve holding of an institution is calculated as the end-of-day

53:

The daily reserve holding of an institution is calculated as the end-of-day

2321:"Charles Goodhart, 2007.02.28, Whatever became of the monetary aggregates?" 2197: 1886:"Charles Goodhart, 2007.02.28, Whatever became of the monetary aggregates?" 1706: 1660: 1430:

http://en.wikipedia.org/User_talk:Bobrayner#Hi_Wonderful_Person.21.21.5E.5E

1170:"Charles Goodhart, 2007.02.28, Whatever became of the monetary aggregates?" 544: 526: 337:"Charles Goodhart, 2007.02.28, Whatever became of the monetary aggregates?" 1435:

http://en.wikipedia.org/User_talk:BigK_HeX#Hi_Wonderful_Person.21.21.5E.5E

2309:. Bank and Credit, the scientific journal of the national bank of Poland. 2257:

http://college.holycross.edu/RePEc/eej/Archive/Volume18/V18N3P305_314.pdf

1957:. Bank and Credit, the scientific journal of the national bank of Poland. 1873:

http://college.holycross.edu/RePEc/eej/Archive/Volume18/V18N3P305_314.pdf

1757:"Paul Tucker, 2007.12.13, Money and credit: Banking and the Macroeconomy" 1740:"Paul Tucker, 2007.12.13, Money and credit: Banking and the Macroeconomy" 1571: 1187:"Paul Tucker, 2007.12.13, Money and credit: Banking and the Macroeconomy" 1127:. Bank and Credit, the scientific journal of the national bank of Poland. 1043:

http://college.holycross.edu/RePEc/eej/Archive/Volume18/V18N3P305_314.pdf

973:

http://college.holycross.edu/RePEc/eej/Archive/Volume18/V18N3P305_314.pdf

945:"Paul Tucker, 2007.12.13, Money and credit: Banking and the Macroeconomy" 933:. Bank and Credit, the scientific journal of the national bank of Poland. 354:"Paul Tucker, 2007.12.13, Money and credit: Banking and the Macroeconomy" 291:. Bank and Credit, the scientific journal of the national bank of Poland. 2448:"Modern Money Mechanics. Page 37. Money Creation and Reserve Management" 1015:"Modern Money Mechanics. Page 37. Money Creation and Reserve Management" 246:"Modern Money Mechanics. Page 37. Money Creation and Reserve Management" 2716:

by Jonathan Golin. Publisher: John Wiley & Sons (August 10, 2001).

2657:

by Jonathan Golin. Publisher: John Wiley & Sons (August 10, 2001).

2467: 769:

to make which is of course why it is still embedded in macroeconomics.

629:

to make which is of course why it is still embedded in macroeconomics.

380: 2283: 1931: 1810: 1406:

The bank now has 27.1 "required reserves" and 72.9 "excess reserves"

1355:

The bank now has 27.1 "required reserves" and 72.9 "excess reserves"

1101: 893: 265: 191: 1440:

http://en.wikipedia.org/User_talk:Reissgo#Joining_Talks_Request_Sent

1497:

Additionally, although when you look at a banks balance sheet, it

1409:

The results are the same and there is no requirement for stage c)

761:

What exactlyis so misleading about the money multiplier approach?

621:

What exactlyis so misleading about the money multiplier approach?

2216:"Freedman, C. Reflections on Three Decades at the Bank of Canada" 423:"Freedman, C. Reflections on Three Decades at the Bank of Canada" 21: 57:

In the United Kingdom, money is endogenous - Mervyn King in 1994

2510:"Montador, B. The implementation of monetary policy in Canada" 2415:

http://www.federalreserve.gov/pubs/feds/2010/201041/index.html

1861:

http://www.federalreserve.gov/pubs/feds/2010/201041/index.html

1446:

evidenced in the higher levels of disputes. Thank you kindly.

1031:

http://www.federalreserve.gov/pubs/feds/2010/201041/index.html

961:

http://www.federalreserve.gov/pubs/feds/2010/201041/index.html

465:"Montador, B. The implementation of monetary policy in Canada" 381:"Disyatat, P. 2010 The bank lending channel revisited. Page 2" 2552:"Paul Tucker, Money and credit: Banking and the Macroeconomy" 1842:"Paul Tucker, Money and credit: Banking and the Macroeconomy" 1286:

1. a relending model using existing deposits to create loans

226:"Paul Tucker, Money and credit: Banking and the Macroeconomy" 2338:"King Mervyn, The transmission mechanism of monetary policy" 1915:"King Mervyn, The transmission mechanism of monetary policy" 1068:"King Mervyn, The transmission mechanism of monetary policy" 860:"King Mervyn, The transmission mechanism of monetary policy" 209:"King Mervyn, The transmission mechanism of monetary policy" 1656: 1232:

after all decisively different from other intermediaries.

833:

after all decisively different from other intermediaries.

777:

it to set the quantity of money, but in the real world we

637:

it to set the quantity of money, but in the real world we

2044:"The fedwire funds service. Overdrafts and risk control" 1969:"The fedwire funds service. Overdrafts and risk control" 149:

https://www.ecb.europa.eu/pub/pdf/other/gendoc2002en.pdf

107:

for decades, and I have been in their party on this."

46:

https://www.ecb.europa.eu/pub/pdf/other/gendoc2002en.pdf

2099:"The Automated Intra-day Repurchase Agreement Function" 1282:

There are therefore two models of lending to consider:

800:

for decades, and I have been in their party on this."

784:

Thirdly if the central bank sets the interest rates it

644:

Thirdly if the central bank sets the interest rates it

2468:"Disyatat, P. 2010 The bank lending channel revisited" 1655:

is the banking practice in which only a fraction of a

2396:"Razzak, W. Money in the Era of Inflation Targeting" 2181:"Glen Stevens, the Australian Economy: Then and now" 1794:"Glen Stevens, the Australian Economy: Then and now" 1085:"Glen Stevens, the Australian Economy: Then and now" 877:"Glen Stevens, the Australian Economy: Then and now" 740:

date to the 19th century, and were subscribed to by

684:

date to the 19th century, and were subscribed to by

507:"Razzak, W. Money in the Era of Inflation Targeting" 320:"Glen Stevens, the Australian Economy: Then and now" 2779:WikiProject Finance & Investment participants 1687:Maybe theres a less long winded way to say this. 2770: 1599:date to the 19th century, and were described by 1526:date to the 19th century, and were described by 2582:"Prof Richard Werner describes credit creation" 1566: 2289:. University of the West of England, Bristol. 1937:. University of the West of England, Bristol. 1107:. University of the West of England, Bristol. 899:. University of the West of England, Bristol. 271:. University of the West of England, Bristol. 1816:. University of the West of England, Bristol. 1415: 1396:171 created deposit money owed to customer 2 1388:100 created deposit money owed to customer 1 1329:100 created deposit money owed to customer 1 668:) 16:29, 14 April 2011 (UTC)andrewedwardjudd 197:. University of the West of England, Bristol. 2740:Bankintroductions.com - Economic Definitions 2681:Bankintroductions.com - Economic Definitions 2403:In New Zealand....money supply is endogenous 1345:81 created deposit money owed to customer 2 1337:90 created deposit money owed to customer 2 514:In New Zealand....money supply is endogenous 1638: 1484: 1274: 1269: 2596:"Mervyn King, Finance: A Return from Risk" 2064:"What is a daylight overdraft at the Fed?" 1989:"What is a daylight overdraft at the Fed?" 143: 583:In the endogenous money view therefor: 101: 724:This booklet was last updated in 1992. 159: 40: 2771: 2473:. Bank for International Settlements. 2200:. Bank for International Settlements. 1582: 1572:http://www.bis.org/review/r060616e.pdf 1239:shortened version of tucker quotation 563: 547:. Bank for International Settlements. 529:. Bank for International Settlements. 386:. Bank for International Settlements. 1698:My suggested version of the text is 1359:The credit money model is as follows 558: 30:WikiProject Finance & Investment 16: 2453:. Federal Reserve Bank of Chicago. 1557: 251:. Federal Reserve Bank of Chicago. 13: 2762:investorwords economic definitions 2703:investorwords economic definitions 2149:Cite has empty unknown parameter: 2114:Cite has empty unknown parameter: 2079:Cite has empty unknown parameter: 2004:Cite has empty unknown parameter: 1020:. Federal Reserve Bank of Chicago. 14: 2790: 2751:Investopedia economic definitions 2692:Investopedia economic definitions 1577: 1420:Hi!^^ I have contacted everyone: 1295:The relending model as as follows 1202: 803: 68:This did not happen all at once. 2134:"Payment and Settlement Systems" 1695:) 01:00, 10 November 2010 (UTC) 1385:(a) 100 paper dollars deposited 1372:Table 1: Private bank T-account 1326:(a) 100 paper dollars deposited 1313:Table 1: Private bank T-account 20: 2755: 2744: 2733: 2707: 2696: 2685: 2674: 2648: 2628: 2608: 2588: 2574: 2564: 2544: 2502: 2460: 2440: 2420: 2408: 2401:. Reserve Bank of New Zealand. 2388: 2347: 2330: 2313: 2296: 2276: 2262: 2250: 2208: 2190: 2173: 2161: 2126: 2091: 2056: 2036: 2016: 1981: 1961: 1944: 1924: 1907: 1895: 1878: 1866: 1854: 1834: 1820: 1803: 1786: 1766: 1749: 1732: 1393:(b) Borrower's IOU worth $ 171 1179: 1162: 1145: 1131: 1114: 1094: 1077: 1060: 1048: 1036: 1024: 1007: 990: 978: 966: 954: 937: 920: 906: 886: 869: 852: 846: 537: 519: 512:. Reserve Bank of New Zealand. 499: 457: 415: 373: 363: 346: 110: 1342:(c) Borrower's IOU worth $ 81 1334:(b) Borrower's IOU worth $ 90 712:Later in the booklet it says 329: 312: 295: 278: 258: 238: 218: 201: 184: 61:But what did he mean by that? 1: 2183:. Reserve Bank of Australia. 1796:. Reserve Bank of Australia. 1454:) 03:38, 21 April 2011 (UTC) 1087:. Reserve Bank of Australia. 879:. Reserve Bank of Australia. 322:. Reserve Bank of Australia. 178: 2101:. Reserve Bank of Australia. 1625:money is endogenous, as the 1567:monetary targeting abandoned 580:it can borrow 100 reserves. 7: 1300:fractional reserve of 10%. 532:under normal circumstances. 10: 2795: 1703:Fractional-reserve banking 1653:Fractional-reserve banking 1648:Currently the page begins 1586: 1416:Joining Talks Request Sent 2584:. WWW.the-free-lunch.com. 1400: 1371: 1349: 1312: 1260:And on page 9-10 he said 1225:And on page 9-10 he said 826:And on page 9-10 he said 732:outside of the mainstream 676:outside of the mainstream 27:This user is a member of 1639:FRB definition revisited 1485:modern banking practices 1275:Comparing lending models 1270:comparing the two models 2532:line feed character in 2490:line feed character in 2376:line feed character in 2238:line feed character in 1713:(cash and other highly 1667:(cash and other highly 734:. Notably, theories of 678:. Notably, theories of 487:line feed character in 445:line feed character in 403:line feed character in 131:2007.12.03 pages 6-7) 1245:On pages 6-7 he said 1210:On pages 6-7 he said 811:On pages 6-7 he said 102:stuff being worked on 1467:Hi Wonderful person! 160:loan drives deposits 144:reserve requirements 41:reserve requirements 2641:. Bank of England. 2621:. Bank of England. 2601:. Bank of England. 2557:. Bank of England. 2360:. Bank of England. 2272:. FT Prentice Hall. 2049:. Federal Reserve. 2029:. Bank of England. 1974:. Federal Reserve. 1847:. Bank of England. 1830:. FT Prentice Hall. 1141:. FT Prentice Hall. 916:. FT Prentice Hall. 231:. Bank of England. 2515:. Bank of Canada. 2343:. Bank of England. 2326:. Bank of England. 2221:. Bank of Canada. 2136:. Bank of England. 2066:. Federal Reserve. 1991:. Federal Reserve. 1920:. Bank of England. 1891:. Bank of England. 1762:. Bank of England. 1745:. Bank of England. 1192:. Bank of England. 1175:. Bank of England. 1158:. Bank of England. 1073:. Bank of England. 950:. Bank of England. 865:. Bank of England. 781:it sets the price. 641:it sets the price. 470:. Bank of Canada. 428:. Bank of Canada. 359:. Bank of England. 342:. Bank of England. 308:. Bank of England. 214:. Bank of England. 2242:at position 369 ( 1601:Joseph Schumpeter 1583:Alternative views 1528:Joseph Schumpeter 1404: 1403: 1353: 1352: 742:Joseph Schumpeter 686:Joseph Schumpeter 564:Alternative views 559:Alternative views 449:at position 369 ( 37: 36: 2786: 2764: 2759: 2753: 2748: 2742: 2737: 2731: 2711: 2705: 2700: 2694: 2689: 2683: 2678: 2672: 2652: 2646: 2645: 2640: 2632: 2626: 2625: 2620: 2612: 2606: 2605: 2600: 2592: 2586: 2585: 2578: 2572: 2568: 2562: 2561: 2556: 2548: 2542: 2541: 2536:at position 89 ( 2535: 2530: 2528: 2520: 2514: 2506: 2500: 2499: 2494:at position 84 ( 2493: 2488: 2486: 2478: 2472: 2464: 2458: 2457: 2452: 2444: 2438: 2437: 2432: 2424: 2418: 2412: 2406: 2405: 2400: 2392: 2386: 2385: 2380:at position 37 ( 2379: 2374: 2372: 2364: 2359: 2351: 2345: 2344: 2342: 2334: 2328: 2327: 2325: 2317: 2311: 2310: 2308: 2300: 2294: 2293: 2288: 2280: 2274: 2273: 2266: 2260: 2254: 2248: 2247: 2241: 2236: 2234: 2226: 2220: 2212: 2206: 2205: 2194: 2188: 2187: 2177: 2171: 2165: 2159: 2158: 2152: 2147: 2145: 2137: 2130: 2124: 2123: 2117: 2112: 2110: 2102: 2095: 2089: 2088: 2082: 2077: 2075: 2067: 2060: 2054: 2053: 2048: 2040: 2034: 2033: 2028: 2020: 2014: 2013: 2007: 2002: 2000: 1992: 1985: 1979: 1978: 1973: 1965: 1959: 1958: 1956: 1948: 1942: 1941: 1936: 1928: 1922: 1921: 1919: 1911: 1905: 1899: 1893: 1892: 1890: 1882: 1876: 1870: 1864: 1858: 1852: 1851: 1846: 1838: 1832: 1831: 1824: 1818: 1817: 1815: 1807: 1801: 1800: 1790: 1784: 1783: 1778: 1770: 1764: 1763: 1761: 1753: 1747: 1746: 1744: 1736: 1615:Charles Goodhart 1603:, and later the 1596:endogenous money 1589:Endogenous money 1558:payments systems 1530:, and later the 1523:endogenous money 1369: 1368: 1310: 1309: 1194: 1193: 1191: 1183: 1177: 1176: 1174: 1166: 1160: 1159: 1157: 1149: 1143: 1142: 1135: 1129: 1128: 1126: 1118: 1112: 1111: 1106: 1098: 1092: 1091: 1081: 1075: 1074: 1072: 1064: 1058: 1052: 1046: 1040: 1034: 1028: 1022: 1021: 1019: 1011: 1005: 1004: 1002: 994: 988: 982: 976: 970: 964: 958: 952: 951: 949: 941: 935: 934: 932: 924: 918: 917: 910: 904: 903: 898: 890: 884: 883: 873: 867: 866: 864: 856: 756:Charles Goodhart 744:, and later the 737:endogenous money 688:, and later the 681:endogenous money 662:Andrewedwardjudd 616:Charles Goodhart 553: 552: 541: 535: 534: 523: 517: 516: 511: 503: 497: 496: 491:at position 89 ( 490: 485: 483: 475: 469: 461: 455: 454: 448: 443: 441: 433: 427: 419: 413: 412: 407:at position 83 ( 406: 401: 399: 391: 385: 377: 371: 367: 361: 360: 358: 350: 344: 343: 341: 333: 327: 326: 316: 310: 309: 307: 299: 293: 292: 290: 282: 276: 275: 270: 262: 256: 255: 250: 242: 236: 235: 230: 222: 216: 215: 213: 205: 199: 198: 196: 188: 80:Charles Goodhart 24: 17: 2794: 2793: 2789: 2788: 2787: 2785: 2784: 2783: 2769: 2768: 2767: 2760: 2756: 2749: 2745: 2738: 2734: 2712: 2708: 2701: 2697: 2690: 2686: 2679: 2675: 2653: 2649: 2638: 2634: 2633: 2629: 2618: 2614: 2613: 2609: 2598: 2594: 2593: 2589: 2580: 2579: 2575: 2569: 2565: 2554: 2550: 2549: 2545: 2533: 2531: 2522: 2521: 2512: 2508: 2507: 2503: 2491: 2489: 2480: 2479: 2470: 2466: 2465: 2461: 2450: 2446: 2445: 2441: 2430: 2426: 2425: 2421: 2413: 2409: 2398: 2394: 2393: 2389: 2377: 2375: 2366: 2365: 2357: 2353: 2352: 2348: 2340: 2336: 2335: 2331: 2323: 2319: 2318: 2314: 2306: 2302: 2301: 2297: 2286: 2282: 2281: 2277: 2268: 2267: 2263: 2255: 2251: 2239: 2237: 2228: 2227: 2218: 2214: 2213: 2209: 2196: 2195: 2191: 2179: 2178: 2174: 2166: 2162: 2150: 2148: 2139: 2138: 2132: 2131: 2127: 2115: 2113: 2104: 2103: 2097: 2096: 2092: 2080: 2078: 2069: 2068: 2062: 2061: 2057: 2046: 2042: 2041: 2037: 2026: 2022: 2021: 2017: 2005: 2003: 1994: 1993: 1987: 1986: 1982: 1971: 1967: 1966: 1962: 1954: 1950: 1949: 1945: 1934: 1930: 1929: 1925: 1917: 1913: 1912: 1908: 1900: 1896: 1888: 1884: 1883: 1879: 1871: 1867: 1859: 1855: 1844: 1840: 1839: 1835: 1826: 1825: 1821: 1813: 1809: 1808: 1804: 1792: 1791: 1787: 1776: 1772: 1771: 1767: 1759: 1755: 1754: 1750: 1742: 1738: 1737: 1733: 1728: 1675: 1645: 1641: 1627:Bank of England 1605:post-Keynesians 1591: 1585: 1580: 1569: 1560: 1532:post-Keynesians 1487: 1479: 1475: 1471: 1464: 1460: 1418: 1366: 1307: 1277: 1272: 1205: 1199: 1197: 1189: 1185: 1184: 1180: 1172: 1168: 1167: 1163: 1155: 1151: 1150: 1146: 1137: 1136: 1132: 1124: 1120: 1119: 1115: 1104: 1100: 1099: 1095: 1083: 1082: 1078: 1070: 1066: 1065: 1061: 1053: 1049: 1041: 1037: 1029: 1025: 1017: 1013: 1012: 1008: 1000: 996: 995: 991: 983: 979: 971: 967: 959: 955: 947: 943: 942: 938: 930: 926: 925: 921: 912: 911: 907: 896: 892: 891: 887: 875: 874: 870: 862: 858: 857: 853: 849: 806: 746:post-Keynesians 695: 690:post-Keynesians 608: 566: 561: 556: 543: 542: 538: 525: 524: 520: 509: 505: 504: 500: 488: 486: 477: 476: 467: 463: 462: 458: 446: 444: 435: 434: 425: 421: 420: 416: 404: 402: 393: 392: 383: 379: 378: 374: 368: 364: 356: 352: 351: 347: 339: 335: 334: 330: 318: 317: 313: 305: 301: 300: 296: 288: 284: 283: 279: 268: 264: 263: 259: 248: 244: 243: 239: 228: 224: 223: 219: 211: 207: 206: 202: 194: 190: 189: 185: 181: 171: 168: 162: 146: 113: 104: 59: 43: 38: 12: 11: 5: 2792: 2782: 2781: 2766: 2765: 2754: 2743: 2732: 2729:978-0471842170 2706: 2695: 2684: 2673: 2670:978-0471842170 2647: 2627: 2607: 2587: 2573: 2563: 2543: 2501: 2459: 2439: 2419: 2407: 2387: 2346: 2329: 2312: 2295: 2275: 2261: 2249: 2207: 2189: 2172: 2160: 2125: 2090: 2055: 2035: 2015: 1980: 1960: 1943: 1923: 1906: 1894: 1877: 1865: 1853: 1833: 1819: 1802: 1785: 1765: 1748: 1730: 1719: 1718: 1673: 1672: 1640: 1637: 1623:United Kingdom 1584: 1581: 1579: 1578:alternate view 1576: 1568: 1565: 1559: 1556: 1486: 1483: 1459: 1456: 1443: 1442: 1437: 1432: 1427: 1417: 1414: 1402: 1401: 1398: 1397: 1394: 1390: 1389: 1386: 1382: 1381: 1378: 1374: 1373: 1351: 1350: 1347: 1346: 1343: 1339: 1338: 1335: 1331: 1330: 1327: 1323: 1322: 1319: 1315: 1314: 1292: 1291: 1287: 1276: 1273: 1271: 1268: 1204: 1201: 1196: 1195: 1178: 1161: 1144: 1130: 1113: 1093: 1076: 1059: 1047: 1035: 1023: 1006: 989: 977: 965: 953: 936: 919: 905: 885: 868: 850: 848: 845: 805: 802: 790: 789: 782: 770: 650: 649: 642: 630: 606: 605: 600: 599: 595: 594: 589: 588: 565: 562: 560: 557: 555: 554: 536: 518: 498: 456: 414: 372: 362: 345: 328: 311: 294: 277: 257: 237: 217: 200: 182: 180: 177: 161: 158: 145: 142: 128: 127: 124: 121: 112: 109: 103: 100: 58: 55: 42: 39: 35: 34: 25: 15: 9: 6: 4: 3: 2: 2791: 2780: 2777: 2776: 2774: 2763: 2758: 2752: 2747: 2741: 2736: 2730: 2726: 2723: 2719: 2715: 2710: 2704: 2699: 2693: 2688: 2682: 2677: 2671: 2667: 2664: 2660: 2656: 2651: 2644: 2637: 2631: 2624: 2617: 2611: 2604: 2597: 2591: 2583: 2577: 2567: 2560: 2553: 2547: 2539: 2526: 2519: 2511: 2505: 2497: 2484: 2477: 2469: 2463: 2456: 2449: 2443: 2436: 2429: 2423: 2416: 2411: 2404: 2397: 2391: 2383: 2370: 2363: 2356: 2350: 2339: 2333: 2322: 2316: 2305: 2299: 2292: 2285: 2279: 2271: 2265: 2258: 2253: 2245: 2232: 2225: 2217: 2211: 2204: 2199: 2193: 2186: 2182: 2176: 2170: 2164: 2156: 2143: 2135: 2129: 2121: 2108: 2100: 2094: 2086: 2073: 2065: 2059: 2052: 2045: 2039: 2032: 2025: 2019: 2011: 1998: 1990: 1984: 1977: 1970: 1964: 1953: 1947: 1940: 1933: 1927: 1916: 1910: 1904: 1898: 1887: 1881: 1874: 1869: 1862: 1857: 1850: 1843: 1837: 1829: 1823: 1812: 1806: 1799: 1795: 1789: 1782: 1775: 1769: 1758: 1752: 1741: 1735: 1731: 1729: 1726: 1723: 1716: 1715:liquid assets 1712: 1708: 1704: 1701: 1700: 1699: 1696: 1694: 1690: 1684: 1683: 1679: 1676: 1670: 1669:liquid assets 1666: 1662: 1658: 1654: 1651: 1650: 1649: 1646: 1643: 1636: 1633: 1630: 1628: 1624: 1620: 1616: 1612: 1608: 1606: 1602: 1598: 1597: 1590: 1575: 1573: 1564: 1555: 1553: 1549: 1543: 1539: 1535: 1533: 1529: 1525: 1524: 1518: 1514: 1510: 1506: 1502: 1500: 1495: 1491: 1482: 1478: 1474: 1470: 1468: 1463: 1455: 1453: 1449: 1441: 1438: 1436: 1433: 1431: 1428: 1426: 1423: 1422: 1421: 1413: 1410: 1407: 1399: 1395: 1392: 1391: 1387: 1384: 1383: 1379: 1376: 1375: 1370: 1367: 1364: 1361: 1360: 1356: 1348: 1344: 1341: 1340: 1336: 1333: 1332: 1328: 1325: 1324: 1320: 1317: 1316: 1311: 1308: 1305: 1301: 1297: 1296: 1288: 1285: 1284: 1283: 1280: 1267: 1264: 1261: 1258: 1254: 1253: 1249: 1246: 1243: 1240: 1237: 1233: 1229: 1226: 1223: 1219: 1218: 1214: 1211: 1208: 1200: 1188: 1182: 1171: 1165: 1154: 1148: 1140: 1134: 1123: 1117: 1110: 1103: 1097: 1090: 1086: 1080: 1069: 1063: 1057: 1051: 1044: 1039: 1032: 1027: 1016: 1010: 999: 993: 987: 981: 974: 969: 962: 957: 946: 940: 929: 923: 915: 909: 902: 895: 889: 882: 878: 872: 861: 855: 851: 844: 841: 838: 834: 830: 827: 824: 820: 819: 815: 812: 809: 801: 797: 794: 787: 783: 780: 776: 771: 768: 764: 763: 762: 759: 757: 753: 749: 747: 743: 739: 738: 733: 728: 725: 722: 719: 716: 713: 710: 706: 702: 699: 698: 693: 691: 687: 683: 682: 677: 672: 669: 667: 663: 659: 656: 653: 647: 643: 640: 636: 631: 628: 624: 623: 622: 619: 617: 613: 609: 602: 601: 597: 596: 591: 590: 586: 585: 584: 581: 579: 573: 569: 551: 546: 540: 533: 528: 522: 515: 508: 502: 494: 481: 474: 466: 460: 452: 439: 432: 424: 418: 410: 397: 390: 382: 376: 366: 355: 349: 338: 332: 325: 321: 315: 304: 298: 287: 281: 274: 267: 261: 254: 247: 241: 234: 227: 221: 210: 204: 193: 187: 183: 176: 174: 172: 169: 166: 164: 157: 154: 151: 150: 141: 138: 132: 125: 122: 119: 118: 117: 108: 99: 95: 91: 87: 83: 81: 77: 73: 69: 66: 62: 54: 51: 48: 47: 32: 31: 26: 23: 19: 18: 2757: 2746: 2735: 2713: 2709: 2698: 2687: 2676: 2654: 2650: 2642: 2630: 2622: 2610: 2602: 2590: 2576: 2566: 2558: 2546: 2534:|quote= 2516: 2504: 2492:|quote= 2474: 2462: 2454: 2442: 2434: 2422: 2410: 2402: 2390: 2378:|quote= 2361: 2349: 2332: 2315: 2298: 2290: 2278: 2264: 2252: 2240:|quote= 2222: 2210: 2201: 2192: 2184: 2175: 2163: 2128: 2093: 2058: 2050: 2038: 2030: 2018: 1983: 1975: 1963: 1946: 1938: 1926: 1909: 1897: 1880: 1868: 1856: 1848: 1836: 1822: 1805: 1797: 1788: 1780: 1768: 1751: 1734: 1727: 1724: 1720: 1702: 1697: 1685: 1680: 1677: 1674: 1663:are kept as 1652: 1647: 1644: 1642: 1634: 1631: 1613: 1609: 1594: 1593:Theories of 1592: 1570: 1561: 1551: 1547: 1544: 1540: 1536: 1521: 1520:Theories of 1519: 1515: 1511: 1507: 1503: 1498: 1496: 1492: 1488: 1480: 1476: 1472: 1466: 1465: 1461: 1444: 1419: 1411: 1408: 1405: 1365: 1362: 1358: 1357: 1354: 1306: 1302: 1298: 1294: 1293: 1281: 1278: 1265: 1262: 1259: 1255: 1252:Bank lending 1251: 1250: 1247: 1244: 1241: 1238: 1234: 1230: 1227: 1224: 1220: 1217:Bank lending 1216: 1215: 1212: 1209: 1206: 1203:Bank lending 1198: 1181: 1164: 1147: 1133: 1116: 1108: 1096: 1088: 1079: 1062: 1050: 1038: 1026: 1009: 992: 980: 968: 956: 939: 922: 908: 900: 888: 880: 871: 854: 842: 839: 835: 831: 828: 825: 821: 818:Bank lending 817: 816: 813: 810: 807: 804:Bank lending 798: 795: 791: 785: 778: 774: 766: 760: 754: 750: 735: 729: 726: 723: 720: 717: 714: 711: 707: 703: 700: 696: 694: 679: 673: 670: 661: 660: 657: 654: 651: 645: 638: 634: 626: 620: 614: 610: 607: 582: 577: 574: 570: 567: 548: 539: 530: 521: 513: 501: 489:|quote= 471: 459: 447:|quote= 429: 417: 405:|quote= 387: 375: 365: 348: 331: 323: 314: 297: 280: 272: 260: 252: 240: 232: 220: 203: 186: 175: 173: 170: 167: 165: 163: 155: 152: 147: 136: 133: 129: 114: 111:Bank lending 105: 96: 92: 88: 84: 78: 74: 70: 67: 63: 60: 52: 49: 44: 28: 1709:is kept as 1689:Fresheneesz 1619:Mervyn King 1552:as required 1548:as required 1380:Liabilites 1321:Liabilites 2722:0471842176 2663:0471842176 2518:determined 1587:See also: 847:References 473:determined 179:References 767:very easy 627:very easy 604:reserves. 550:achieved. 2773:Category 2525:cite web 2483:cite web 2369:cite web 2231:cite web 2151:|1= 2142:cite web 2116:|1= 2107:cite web 2081:|1= 2072:cite web 2006:|1= 1997:cite web 1711:reserves 1707:deposits 1665:reserves 1661:deposits 1473:Versus. 1448:rm2dance 775:requires 635:requires 572:loaned. 480:cite web 438:cite web 396:cite web 389:lending. 116:assumed 1499:appears 1377:Assets 1318:Assets 2727: 2720: 2668: 2661: 1290:above. 2639:(PDF) 2619:(PDF) 2599:(PDF) 2555:(PDF) 2513:(PDF) 2471:(PDF) 2451:(PDF) 2431:(PDF) 2399:(PDF) 2358:(PDF) 2341:(PDF) 2324:(PDF) 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