Debunking Economics - the podcast cover image

Banks, reserves, lending and money supply

Debunking Economics - the podcast

CHAPTER

Understanding Bank Reserves and Money Creation

This chapter explores the complexities of bank reserves, cash deposits, and the intricate relationship between private banks and central banks. It challenges traditional banking models by illustrating how banks can lend more than they hold in reserves, emphasizing the role of electronic transactions in modern banking. The discussion critiques historical economic theories and highlights the significance of understanding these concepts for grasping contemporary financial systems.

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