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> Banks that lend out _deposits_, for loans to others, who then deposit those loans as deposits, are _lying_ to their customers about the availability of the mo
by chrisbolt 4y ago
> Banks that lend out _deposits_, for loans to others, who then deposit those loans as deposits, are _lying_ to their customers about the availability of the money
Isn’t this just fractional-reserve banking?
- throw0101a 4y ago>> Banks that lend out _deposits_, for loans to others, who then deposit those loans as deposits, are _lying_ to their customers about the availability of the money > Isn’t this just fractional-reserve banking? Yes, and it is no longer a thing, and it has not been for a while. Tobin call this the "Old View" in 1963: * https://elischolar.library.yale.edu/cowles-discussion-paper-series/388/ https://elischolar.library.yale.edu/cowles-discussion-paper-... For how things actually work in recent decades see: * https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...