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While pure credit as it is originated does not have to be covered by central bank or cash funds, in outgoing transfers it has to be. Banks cannot transfer their
by 7373737373 5y ago
While pure credit as it is originated does not have to be covered by central bank or cash funds, in outgoing transfers it has to be. Banks cannot transfer their own book money.
- 3np 5y agoSo banks will have accounts at the central bank and/or with other banks. Settlement does not require physical transfer of paper cash, in either case. > Banks cannot transfer their own book money. I'm not sure what you mean by this - could you elaborate?
- 7373737373 5y agoWere it not for bank regulation, banks could create unlimited amount of credit, as long as they can cover all net outflows