It has become popular among economists and policy wonks to dismiss the notion of banks as credit intermediaries as obsolete. After all, the practice of "fractional reserve banking" means that banks can effectively "create money out of thin air" when they make a new loan. Economist George Selgin discusses his new working paper that defends the traditional view.

Watch the video version of this episode here: https://www.youtube.com/watch?v=xjrYmIC9-D8

Relevant Links:

- https://www.infineo.ai/articles/parsing-george-selgins-debate-on-credit-intermediation

- https://www.cato.org/working-paper/banks-are-intermediaries-loanable-funds - https://www.bankofengland.co.uk/working-paper/2018/banks-are-not-intermediaries-of-loanable-funds-facts-theory-and-evidence - https://www.youtube.com/watch?v=UDLCa7maGZA

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Ep. 32: George Selgin Defends the View of Banks as Credit Intermediaries