> Likewise in the naive view, if the central bank loans a commercial bank a bunch of cash, then the commercial bank can use that cash to make loans. Define "ca

> Likewise in the naive view, if the central bank loans a commercial bank a bunch of cash, then the commercial bank can use that cash to make loans. Define "cash". What the central bank gives to banks is not the money you and I use: what is given is not something that can be turned around and used in a business loan or a residential mortgage. What the central bank 'gives' banks is simply a credit in their reserve account for inter-bank settlements. And having more reserves makes little difference in the creation loans, as (as mentioned before) some places don't even have reserve requirements: * https://en.wikipedia.org/wiki/Reserve_requirement#Countries_and_districts_without_reserve_requirements https://en.wikipedia.org/wiki/Reserve_requirement#Countries_...