
Banks, reserves, lending and money supply
Debunking Economics - the podcast
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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