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A comment on The Crash of ’87, from the Wall Street Players Who Lived It. Parent comment
-From deposits. -In the interbank market, where banks with excess reserves lean to bank that need reserves. -From the Central Bank.
The Central Bank always lend the necessary reserves. A different issue is if that would be a good business for the bank.
The point is that the quantity a bank can lend it's not limited by deposits as the normal narrative imply.
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-From deposits. -In the interbank market, where banks with excess reserves lean to bank that need reserves. -From the Central Bank.
The Central Bank always lend the necessary reserves. A different issue is if that would be a good business for the bank.
The point is that the quantity a bank can lend it's not limited by deposits as the normal narrative imply.