Posts Tagged ‘Banking’
By: Warren Mosler
Aiming at public purpose while reducing government discretionary power, increasing spending power, fixing the banking system, restoring states’ budgets, keeping inflation in check, achieving full employment, easing tensions in the mortgage market, and ensuring sufficient liquidity at all times.
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- Tags: Banking, FDIC, Mosler, Treasury, US Economy
What Will Change the Total Amount of Bank Deposits Held by the (Non-Bank) Private Sector?
In: Flash Cards
By: Andrea Terzi
The total amount of bank deposits has nothing to do with the saving attitude, or with the spending decisions, of bank accounts’ holders. A new bank deposit can only be created through two main channels. In one, deposits are born twins with bank loans to the non-bank private sector (households or firms). In the other, deposits are born twins with bank reserves as a result of payments made by the public sector (Treasury or Central bank) to the non-bank private sector. A third process, yet smaller in importance, is when the banking sector makes net payments to the non-bank private sector.
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- Tags: Bank, Bank Deposits, Banking, Central, Central Bank, Private Sector
By: Andrea Terzi
No, it never does. The total amount of deposits in the banking system cannot change as a result of spending decisions by households or firms (technically, the “non-bank private sector”). Spending decisions can only move deposits from one account to another, and cannot cause a change in overall deposits.
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- Tags: Bank Deposits, Banking, Spending
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- What Will Change the Total Amount of Bank Deposits Held by the (Non-Bank) Private Sector?
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