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Money exists because of debt. Until you can lend money to regular people who often wont pay back you can't replace banks.

• jacknews 5y ago
  Clearly people mostly do pay it back, or it would not be a very profitable business, which it definitely is. There's no reason CB can't issue loans directly, rather than indirectly through the banks. Perhaps more realistic is a debt market where private enterprise take on loan risk for commission or interest of some kind, but the power to create fractional-reserve money is not a requirement for that.
  • rr808 5y ago
    > a debt market where private enterprise take on loan risk for commission or interest of some kind Surely this is what banks do right now. > the power to create fractional-reserve money is not a requirement for that. If you take a loan from a CB say, then deposit it somewhere, then that money is loaned out again, surely that is fractional banking? If you really disallow someone who takes a loan from being lent out again. How do you increase the money supply? Say population grows 5% and economic growth means 10% higher GDP - how do you increase money supply to match?
    • jacknews 5y ago
      Private lenders would simply guarantee the loan, which would be issue by the CB, creating new money.
      • warkdarrior 5y ago
        > Private lenders would simply guarantee the loan, which would be issue by the CB, creating new money. That's just fractional reserve banking but with extra steps. Since the private lender is guaranteeing the loan, they have to have an asset for that guarantee.
  • cuteboy19 5y ago
    If a central bank starts giving out loans it is called a state bank. It is no different from a regular bank and there can be many different state banks in a country.