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That doesn’t hold - the central bank could loan all the cash (really we mean reserves) it wants and the bank still be unable to make a loan. Because the bank ca
by CraigJPerry 4y ago
That doesn’t hold - the central bank could loan all the cash (really we mean reserves) it wants and the bank still be unable to make a loan. Because the bank cannot break its capital requirements and the central bank can do nothing to help that situation.
Similarly the central bank could loan nothing and the commerical bank could loan millions.