How to Start a Bank

Bank lending isn't reserve constraint, so it's always just about the price of funding more than a stock of funds that you could then lend from. That's where like the monetarists, like in the 80s, sort of found that they really couldn't target the money aggregates that they wanted to because by limiting the amount of reserves in the system didn't necessarily limit the amount of credit that was created. And it's just one of those situations where because it's, because that system is sort of an endogenous system, it doesn't really require anything external.