The Bundesbank article causes it to be clear that bank financing just isn’t reserve-constrained.

Geldschopfung erfolgt zunachst unabhangig von bestehenden Zentralbank-guthaben der Banken … Geldschopfung zeigt im Besonderen, dass die Kreditvergabe ohne that is grundsatzlich Zu usse von Kundeneinlagen statt finden kann.

Or, “Money is first developed in addition to the banking institutions’ current bank balances …” during the central bank and that bank “lending can invariably happen without previous inflow of customer deposits. ”

The Bundesbank says that this insight:

Dies widerlegt einen weitverbreiteten Irrtum, wonach die Bank im Augenblick der Kreditvergabe nur als Intermediar auftritt, additionally Kredite mit that is lediglich vergeben kann, die sie zuvor als Einlage von anderen Kunden erhalten hat.

Or, this understanding “rejects the widespread error” that sees the financial institution as a intermediary allocating loans with funds “previously received as deposits off their customers”.

So that the indisputable fact that accumulating main bank balances (reserves) will allow commercial banking institutions to grow loans is dismissed as lies as is the concept that the lender depends on build up to produce loans – two central propositions of traditional monetary theory that MMT has exposed in past times.

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