
Banks, reserves, lending and money supply
Debunking Economics - the podcast
Understanding Banking Mechanics
This chapter explores the practical workings of banks through the fictional Dobby Bank, discussing key concepts like banking licenses, electronic transactions, and the nature of deposits. It challenges traditional banking models by clarifying how loans create deposits and examining the role of reserves in financial stability. The discussion highlights the confusion surrounding banking operations and the necessity for banks to manage reserves and liquidity effectively.
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