Musgrave On 100% Reserves
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 dear the Table of contents, reproduced partially below.
The parent "narrow Banking" or "full reserve banking" needs improvement. It's truly really broad banking -- then long equally the banking is funded yesteryear equity or long-term debt. To order "narrow" is almost a fallacy inwards itself, together with perpetuates the fallacy that depository fiscal establishment lending volition dry out up. Maybe "Equity financed banking" or "full reserve deposit taking" would live better. Can anyone squall back of a parent that is both sexy together with accurate?
Musgrave's Fourty-four fallacies regarding sum 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 majuscule is expensive for taxation reasons?.................................................... 38
4. FR agency the destination of banks?......................................................................... 39
5. Central banks volition withal accept to lend to commercial banks? ............................ 39
6. FR stops banks producing coin from sparse air which tin flaming fund investments?... 41
7. Investments nether FR mightiness non live viable? .................................................. 41
8. FR volition non trim down pleas yesteryear failing industries to live rescued yesteryear government? 42
9. The terms of converting to FR volition live high?..................................................... 42
10. Central depository fiscal establishment committees won’t live politically neutral? ................................... 42
11. Administration costs of FR would live high?.................................................... 44
12. The terms of electrical flow accounts volition rising nether FR?........................................... 44
13. FR is subject on demand injections? ....................................................... 45
14. The lawsuit of FR on inflation together with unemployment is unclear?......................... 45
15. FR would drive concern to the unregulated sector?..................................... 46
16. The dry ground cannot live trusted amongst peoples’ money?........................................ 46
17. Vested interests would oppose FR?.............................................................. 47
18. FR volition trim down invention yesteryear banks? ............................................................. 48
19. Deposit insurance together with lender of final resort solves banking problems?......... 48
20. Lenders volition endeavour to plough their liabilities into “near-monies”? ............................. 49
21. Anyone tin flaming practise money, so trying to boundary coin creation is futile?........ 50
22. Advocates of FR are concerned simply amongst retail banking? .............................. 51
23. Central banks volition withal accept to lend to commercial banks? ............................ 39
24. It wasn’t simply banks that failed inwards 2008: likewise households became overindebted?...........................................................................................................52
25. Creation of liquidity / coin is prevented?.................................................... 53
26. Funding via commercial newspaper would live to a greater extent than hard nether FR? ................ 54
27. FR is nearly the same equally monetarism? ......................................................... 54
28. There is no demand for rubber or warehouse banks?....................................... 55
29. FR would displace a stampede to rubber accounts? ............................................ 56
30. FR would heighten the terms of funding banks?.................................................... 56
31. Fractional reserve is non fraudulent? ............................................................. 57
32. FR volition non halt blast together with bust? ................................................................... 58
33. Bank shareholders volition demand a high furnish to reverberate their incertitude about
what a depository fiscal establishment truly 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 ameliorate than FR? .............................................................. 68
38. FR doesn’t insure against liquidity shocks?................................................... 69
39. Government couldn’t hit plenty coin nether FR? ............................. 70
40. FR prevents all lending?................................................................................ 70
41. Banks volition endeavour 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 live larger nether FR?......................................... 76
I haven't read the newspaper yet, but I dear the Table of contents, reproduced partially below.
The parent "narrow Banking" or "full reserve banking" needs improvement. It's truly really broad banking -- then long equally the banking is funded yesteryear equity or long-term debt. To order "narrow" is almost a fallacy inwards itself, together with perpetuates the fallacy that depository fiscal establishment lending volition dry out up. Maybe "Equity financed banking" or "full reserve deposit taking" would live better. Can anyone squall back of a parent that is both sexy together with accurate?
Musgrave's Fourty-four fallacies regarding sum 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 majuscule is expensive for taxation reasons?.................................................... 38
4. FR agency the destination of banks?......................................................................... 39
5. Central banks volition withal accept to lend to commercial banks? ............................ 39
6. FR stops banks producing coin from sparse air which tin flaming fund investments?... 41
7. Investments nether FR mightiness non live viable? .................................................. 41
8. FR volition non trim down pleas yesteryear failing industries to live rescued yesteryear government? 42
9. The terms of converting to FR volition live high?..................................................... 42
10. Central depository fiscal establishment committees won’t live politically neutral? ................................... 42
11. Administration costs of FR would live high?.................................................... 44
12. The terms of electrical flow accounts volition rising nether FR?........................................... 44
13. FR is subject on demand injections? ....................................................... 45
14. The lawsuit of FR on inflation together with unemployment is unclear?......................... 45
15. FR would drive concern to the unregulated sector?..................................... 46
16. The dry ground cannot live trusted amongst peoples’ money?........................................ 46
17. Vested interests would oppose FR?.............................................................. 47
18. FR volition trim down invention yesteryear banks? ............................................................. 48
19. Deposit insurance together with lender of final resort solves banking problems?......... 48
20. Lenders volition endeavour to plough their liabilities into “near-monies”? ............................. 49
21. Anyone tin flaming practise money, so trying to boundary coin creation is futile?........ 50
22. Advocates of FR are concerned simply amongst retail banking? .............................. 51
23. Central banks volition withal accept to lend to commercial banks? ............................ 39
24. It wasn’t simply banks that failed inwards 2008: likewise households became overindebted?...........................................................................................................52
25. Creation of liquidity / coin is prevented?.................................................... 53
26. Funding via commercial newspaper would live to a greater extent than hard nether FR? ................ 54
27. FR is nearly the same equally monetarism? ......................................................... 54
28. There is no demand for rubber or warehouse banks?....................................... 55
29. FR would displace a stampede to rubber accounts? ............................................ 56
30. FR would heighten the terms of funding banks?.................................................... 56
31. Fractional reserve is non fraudulent? ............................................................. 57
32. FR volition non halt blast together with bust? ................................................................... 58
33. Bank shareholders volition demand a high furnish to reverberate their incertitude about
what a depository fiscal establishment truly 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 ameliorate than FR? .............................................................. 68
38. FR doesn’t insure against liquidity shocks?................................................... 69
39. Government couldn’t hit plenty coin nether FR? ............................. 70
40. FR prevents all lending?................................................................................ 70
41. Banks volition endeavour 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 live larger nether FR?......................................... 76
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