Dry Powder: Where to Park Your Cash
Many Happy Returns
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What's the Multiplier Effect?
Most money creation happens via commercial banks. They can make as many loans as they want for as much value as they want. But there are certain risks that come with that, which is the increase in the size of the balance sheet. In Europe, we have a tiltro scheme where if you had lots of loans to the real economy, you got preferential funding from the ECB. And this was very effective. It made banks want to lend because they got really cheap funding and it increased their profitability.
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