Where Does Money Come From? by Ryan-Collins, Josh -- Read -- Imperial Library of Trantor

Index

Praise for Where Does Money Come From Title Page Copyright Acknowledgments Contents Foreword 1. Introduction

1.1. Key questions 1.2. Overview of key findings

1.2.1. The money supply and how it is created 1.2.2. Popular misconceptions of banking

1.3. How the book is structured References

2. What Do Banks Do?

2.1. The confusion around banking 2.2. Popular perceptions of banking 1: the safe-deposit box

2.2.1. We do not own the money we have put in the bank

2.3. Popular perceptions of banking 2: taking money from savers and lending it to borrowers 2.4. Three forms of money 2.5. How banks create money by extending credit 2.6. Textbook descriptions: the multiplier model 2.7. Problems with the textbook model 2.8. How money is actually created References

3. The Nature and History of Money And Banking

3.1. The functions of money 3.2. Commodity theory of money: money as natural and neutral

3.2.1. Classical economics and money 3.2.2. Neo-classical economics and money 3.2.3. Problems with the orthodox story

3.3. Credit theory of money: money as a social relationship

3.3.1. Money as credit: historical evidence 3.3.2. The role of the state in defining money

3.4. Key historical developments: promissory notes, fractional reserves and bonds

3.4.1. Promissory notes 3.4.2. Fractional reserve banking 3.4.3. Bond issuance and the creation of the Bank of England

3.5. Early monetary policy: the Bullionist debates and 1844 Act 3.6. Twentieth century: the decline of gold, deregulation and the rise of digital money

3.6.1. A brief history of exchange rate regimes 3.6.2. WWI, the abandonment of the gold standard and the regulation of credit 3.6.3. Deregulation of the banking sector in the 1970s and 1980s 3.6.4. The emergence of digital money

References

4. Money and Banking Today

4.1. Liquidity, Goodhart's law, and the problem of defining money 4.2. Banks as the creators of money as credit 4.3. Payment: using central bank reserves for interbank payment

4.3.1. Interbank clearing: reducing the need for central bank reserves 4.3.2. Effects on the money supply

4.4. Cash and seignorage

4.4.1. Is cash a source of 'debt-free' money?

4.5. How do banks decide how much central bank money they need? 4.6. Is commercial bank money as good as central bank money?

4.6.1. Deposit insurance

4.7. Managing money: repos, open market operations, and quantitative easing (QE)

4.7.1. Repos and open market operations 4.7.2. Standing facilities 4.7.3. Quantitative Easing 4.7.4. Discount Window Facility

4.8. Managing money: solvency and capital

4.8.1. Bank profits, payments to staff and shareholders and the money supply

4.9. Summary: liquidity and capital constraints on money creation References

5. Regulating Money Creation and Allocation

5.1. Protecting against insolvency: capital adequacy rules

5.1.1. Why capital adequacy requirements do not limit credit creation 5.1.2. Leverage Ratios: a variant of capital adequacy rules

5.2. Regulating liquidity

5.2.1. Compulsory reserve ratios 5.2.2. Sterling stock liquidity regime (SLR)

5.3. Securitisation, shadow banking and the financial crisis 5.4. The financial crisis as a solvency and liquidity crisis 5.5. Endogenous versus exogenous money 5.6. Credit rationing, allocation and the Quantity Theory of Credit 5.7. Regulating bank credit directly: international examples References

6. Government Finance and Foreign Exchange

6.1. The European Union and restrictions on government money creation

6.1.1. The Eurozone crisis and the politics of monetary policy

6.2. Government taxes, borrowing and spending (fiscal policy)

6.2.1. Taxation 6.2.2. Borrowing 6.2.3. Government spending and idle balances

6.3. The effect of government borrowing on the money supply: 'crowding out'

6.3.1. Linking fiscal policy to increased credit creation

6.4. Foreign exchange, international capital flows and the effects on money

6.4.1. Foreign exchange payments 6.4.2. Different exchange rate regimes 6.4.3. Government intervention to manage exchange rates and the 'impossible trinity'

6.5. Summary References

7. Conclusions

7.1. The history of money: credit or commodity? 7.2. What counts as money: drawing the line 7.3. Money is a social relationship backed by the state 7.4. Implications for banking regulation and reforming the current system 7.5. Towards effective reform: Questions to consider 7.6. Are there alternatives to the current system?

7.6.1. Government borrowing directly from commercial banks 7.6.2. Central bank credit creation for public spending 7.6.3. Money-financed fiscal expenditure 7.6.4. Regional or local money systems

7.7. Understanding money and banking References

Appendices

Appendix 1: The Central Bank's Interest Rate Regime

A1.1. Setting interest rates - demand-driven central bank money A1.2. Setting interest rates - supply-driven central bank money

Appendix 2: Government Bank Accounts

A2.1. The Consolidated Fund A2.2. The National Loans Fund A2.3. The Debt Management Account A2.4. The Exchange Equalisation Account (EEA)

Appendix 3: Foreign Exchange Payment, Trade and Speculation

A3.1. Trade and speculation A3.2. The foreign exchange payment system

A3.2.1. Traditional correspondent banking A3.2.2. Bilateral netting A3.2.3. Payment versus payment systems: the case of CLS Bank A3.3.4. On Us, with and without risk A3.3.5. Other payment versus payment settlement methods

References

Index

A B C D E F G H I K L M N O P Q R S T U V W

List of Explanatory Boxes

Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Box 7 Box 8 Box 9 Box 10 Box 11 Box 12 Box 13 Box A1 Box A2

List of Figures, Charts and Graphs

Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 Figure 13 Figure 14 Figure 15 Figure 16 Figure 17 Figure 18 Figure 19 Figure 20 Figure 21 Figure 22 Figure A1 Figure A2 Figure A3 Figure A4 Figure A5 Figure A6 Figure A7 Figure A8

List of T-charts

T-chart 1 T-chart 2 T-chart 3 T-chart 4 T-chart 5 T-chart 6 T-chart 7 T-chart 8 T-chart 9 T-chart 10

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