Re:Money creation in the modern economy (2014) [pdf]
by andrepd on Thursday September 09, 2021 @04:55PM
(#28474548)
But the point is that the money they create is 100% fungible with central bank banknotes! It is passed onto the economy as cash. It does not come with a tag saying "created by Santander" or whatever.
> Making loans changes banks' reserve requirements, so they're not zero-cost.
Okay! So give me similar requirements! Asset/liability ratios, reserve requirements, cash flow requirements, the works, to determine given my finances how much liabilities I can create.
Re:Money creation in the modern economy (2014) [pdf]
by rahimnathwani on Thursday September 09, 2021 @04:59PM
(#28474581)
Sure, go ahead. Instructions here: https://www.bankofengland.co.uk/prudential-regulation/new-ba...
Only the ECB and national central banks can create € notes (by which I mean central bank cash money).
Nothing is stopping you from creating your own notes denominated in €, but these would be obligations (IOUs) issued by andrepd. Just like bank deposits, these notes are private money, not central bank money.
It might be tough for you to find a car dealer willing to accept these andrepd € notes, though.
"The bank creates zero-cost virtual cash"
Making loans changes banks' reserve requirements, so they're not zero-cost.