In a comment on an before post, Ralph Musgrave pointed to his interesting novel paper on 100% reserve banking.
I haven't read the newspaper yet, but I beloved the Table of contents, reproduced partially below.
The cite "narrow Banking" or "full reserve banking" needs improvement. It's genuinely real broad banking -- as well as so long every bit the banking is funded past times equity or long-term debt. To enjoin "narrow" is almost a fallacy inwards itself, as well as perpetuates the fallacy that depository fiscal establishment lending volition dry out up. Maybe "Equity financed banking" or "full reserve deposit taking" would hold upwards better. Can anyone scream back of a cite that is both sexy as well as accurate?
Musgrave's Fourty-four fallacies regarding amount reserves:
Section 2: Flawed arguments against FR. .............................. 36
1. FR limits the availability of credit? ................................................................. 36
2. Central depository fiscal establishment coin is non debt free?............................................................ 38
3. Bank working capital missive of the alphabet is expensive for taxation reasons?.................................................... 38
4. FR agency the cease of banks?......................................................................... 39
5. Central banks volition withal convey to lend to commercial banks? ............................ 39
6. FR stops banks producing coin from sparse air which tin reach the axe fund investments?... 41
7. Investments nether FR powerfulness non hold upwards viable? .................................................. 41
8. FR volition non cut down pleas past times failing industries to hold upwards rescued past times government? 42
9. The toll of converting to FR volition hold upwards high?..................................................... 42
10. Central depository fiscal establishment committees won’t hold upwards politically neutral? ................................... 42
11. Administration costs of FR would hold upwards high?.................................................... 44
12. The toll of electrical flow accounts volition rising nether FR?........................................... 44
13. FR is subject on demand injections? ....................................................... 45
14. The resultant of FR on inflation as well as unemployment is unclear?......................... 45
15. FR would drive job organization to the unregulated sector?..................................... 46
16. The acre cannot hold upwards trusted alongside peoples’ money?........................................ 46
17. Vested interests would oppose FR?.............................................................. 47
18. FR volition cut down conception past times banks? ............................................................. 48
19. Deposit insurance as well as lender of final resort solves banking problems?......... 48
20. Lenders volition attempt to plough their liabilities into “near-monies”? ............................. 49
21. Anyone tin reach the axe practise money, thence trying to boundary coin creation is futile?........ 50
22. Advocates of FR are concerned only alongside retail banking? .............................. 51
23. Central banks volition withal convey to lend to commercial banks? ............................ 39
24. It wasn’t only banks that failed inwards 2008: besides households became overindebted?...........................................................................................................52
25. Creation of liquidity / coin is prevented?.................................................... 53
26. Funding via commercial newspaper would hold upwards to a greater extent than hard nether FR? ................ 54
27. FR is nearly the same every bit monetarism? ......................................................... 54
28. There is no demand for prophylactic or warehouse banks?....................................... 55
29. FR would effort a stampede to prophylactic accounts? ............................................ 56
30. FR would enhance the toll of funding banks?.................................................... 56
31. Fractional reserve is non fraudulent? ............................................................. 57
32. FR volition non halt nail as well as bust? ................................................................... 58
33. Bank shareholders volition demand a high supply to reverberate their doubt about
what a depository fiscal establishment genuinely does? ................................................................................. 60
34. FR reduces commercial depository fiscal establishment flexibility? ....................................................... 60
35. FR would non halt depository fiscal establishment runs?....................................................................... 61
36. Vickers’s flawed criticisms of FR. .................................................................. 61
37. Regulating loans is meliorate than FR? .............................................................. 68
38. FR doesn’t insure against liquidity shocks?................................................... 69
39. Government couldn’t create plenty coin nether FR? ............................. 70
40. FR prevents all lending?................................................................................ 70
41. Banks volition attempt to circumvent FR rules?........................................................... 72
42. Converting to FR involves a huge bailout of existing banks? ........................ 72
43. The Money Creation Committee would non regulate demand accurately? .... 75
44. Interest charge per unit of measurement gyrations would hold upwards larger nether FR?......................................... 76
I haven't read the newspaper yet, but I beloved the Table of contents, reproduced partially below.
The cite "narrow Banking" or "full reserve banking" needs improvement. It's genuinely real broad banking -- as well as so long every bit the banking is funded past times equity or long-term debt. To enjoin "narrow" is almost a fallacy inwards itself, as well as perpetuates the fallacy that depository fiscal establishment lending volition dry out up. Maybe "Equity financed banking" or "full reserve deposit taking" would hold upwards better. Can anyone scream back of a cite that is both sexy as well as accurate?
Musgrave's Fourty-four fallacies regarding amount reserves:
Section 2: Flawed arguments against FR. .............................. 36
1. FR limits the availability of credit? ................................................................. 36
2. Central depository fiscal establishment coin is non debt free?............................................................ 38
3. Bank working capital missive of the alphabet is expensive for taxation reasons?.................................................... 38
4. FR agency the cease of banks?......................................................................... 39
5. Central banks volition withal convey to lend to commercial banks? ............................ 39
6. FR stops banks producing coin from sparse air which tin reach the axe fund investments?... 41
7. Investments nether FR powerfulness non hold upwards viable? .................................................. 41
8. FR volition non cut down pleas past times failing industries to hold upwards rescued past times government? 42
9. The toll of converting to FR volition hold upwards high?..................................................... 42
10. Central depository fiscal establishment committees won’t hold upwards politically neutral? ................................... 42
11. Administration costs of FR would hold upwards high?.................................................... 44
12. The toll of electrical flow accounts volition rising nether FR?........................................... 44
13. FR is subject on demand injections? ....................................................... 45
14. The resultant of FR on inflation as well as unemployment is unclear?......................... 45
15. FR would drive job organization to the unregulated sector?..................................... 46
16. The acre cannot hold upwards trusted alongside peoples’ money?........................................ 46
17. Vested interests would oppose FR?.............................................................. 47
18. FR volition cut down conception past times banks? ............................................................. 48
19. Deposit insurance as well as lender of final resort solves banking problems?......... 48
20. Lenders volition attempt to plough their liabilities into “near-monies”? ............................. 49
21. Anyone tin reach the axe practise money, thence trying to boundary coin creation is futile?........ 50
22. Advocates of FR are concerned only alongside retail banking? .............................. 51
23. Central banks volition withal convey to lend to commercial banks? ............................ 39
24. It wasn’t only banks that failed inwards 2008: besides households became overindebted?...........................................................................................................52
25. Creation of liquidity / coin is prevented?.................................................... 53
26. Funding via commercial newspaper would hold upwards to a greater extent than hard nether FR? ................ 54
27. FR is nearly the same every bit monetarism? ......................................................... 54
28. There is no demand for prophylactic or warehouse banks?....................................... 55
29. FR would effort a stampede to prophylactic accounts? ............................................ 56
30. FR would enhance the toll of funding banks?.................................................... 56
31. Fractional reserve is non fraudulent? ............................................................. 57
32. FR volition non halt nail as well as bust? ................................................................... 58
33. Bank shareholders volition demand a high supply to reverberate their doubt about
what a depository fiscal establishment genuinely does? ................................................................................. 60
34. FR reduces commercial depository fiscal establishment flexibility? ....................................................... 60
35. FR would non halt depository fiscal establishment runs?....................................................................... 61
36. Vickers’s flawed criticisms of FR. .................................................................. 61
37. Regulating loans is meliorate than FR? .............................................................. 68
38. FR doesn’t insure against liquidity shocks?................................................... 69
39. Government couldn’t create plenty coin nether FR? ............................. 70
40. FR prevents all lending?................................................................................ 70
41. Banks volition attempt to circumvent FR rules?........................................................... 72
42. Converting to FR involves a huge bailout of existing banks? ........................ 72
43. The Money Creation Committee would non regulate demand accurately? .... 75
44. Interest charge per unit of measurement gyrations would hold upwards larger nether FR?......................................... 76
