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Re:Texas Banker’s Game Plan: Ditch Branches, Prosper by h4nkoslo on Wednesday October 05, 2016 @05:55PM (#12648282)
Are nonbank lenders still able to do the bank trick of money-creation?
Re:Texas Banker’s Game Plan: Ditch Branches, Prosper by bbgtpm on Wednesday October 05, 2016 @07:47PM (#12648969)
I don't think so. Money creation through loans by banks is vital to the proper functioning of the economy, but is tightly regulated by the Federal Reserve and various other agencies because unchecked lending has in the past resulted in sub-optimal outcomes. Without a banking charter, and hence access to a reserve account with the Fed, loans must be made from pre-existing capital.
Re:Texas Banker’s Game Plan: Ditch Branches, Prosper by JumpCrisscross on Wednesday October 05, 2016 @09:53PM (#12649605)
Anyone can create money because credit creates money. The lower down you go (i.e. M3, M2, M1, M0) the more controlled the process is. But a private firm raising capital and signing term sheets, in a certain but very real sense, creates spending power.