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Author: Mr.Jaromir Benes
Publisher: International Monetary Fund
ISBN: 1475505523
Category : Business & Economics
Languages : en
Pages : 71
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Book Description
At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.
Author: Ralph . Musgrave.
Publisher: Createspace Independent Publishing Platform
ISBN: 9781501023668
Category :
Languages : en
Pages : 130
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Book Description
The banking crisis and recession which started around 2007 and the astronomic amounts of public money used to bail out banks made it obvious that there was something seriously wrong with the banking system. This was very much a repeat of the 1929 crash and subsequent bank failures and recession. One response in the 1930s was the promotion of full reserve or "100% reserve" banking particularly by economists at the University of Chicago. However, full reserve banking while it benefits ordinary households and the economy as a whole does not benefit banks or the politicians funded by banks. That is, as Milton Friedman pointed out, full reserve (FR) tends to be opposed by vested interests. And in the 1930s, the vested interests won. However, the 2007 crisis caused a re-consideration of FR, and this book sets out the arguments for it. One merit of FR is its simplicity. It is certainly simple compared to other attempts at bank reform taking place at the time of writing, e.g. Dodd-Frank in the US or the Vickers proposals in the UK. Essentially FR consists of splitting the banking industry in two. One half is for those who want specific sums of money kept in a totally safe fashion. That money is not safe because of any sort of artificial taxpayer funded subsidy or guarantee, which is how bank accounts are currently made safe. The money is safe because it is INHERENTLY safe: that is, the money is just lodged at the central banks and/or it is invested in short term government debt. The second half offers loans to mortgagors, businesses and so on, but that half is funded just by shares, not by deposits which banks claim to be entirely safe (but which clearly are not entirely safe unless they are backed by artificial taxpayer funded guarantees). One of the many advantages of full reserve is that it is near impossible for the entities or banks making up those two halves to suddenly fail, and thus spark off credit crunches or recessions. Though given poor management, any of those entities can slowly decline, resulting perhaps in a take-over by more competent entities / banks. Also FR banking does not require any sort of subsidy, plus there needn't be any limit the amount of money that any individual can lodge in a totally safe fashion, that limit being £85,000 at the time of writing in the UK. FR results in, 1 less borrowing and lending, 2 a rise in interest rates, and 3 a decline in debts. However, that rise in interest rates would be small compared to the HUGE VARIATIONS in interest rates over the last thirty years or so. Moreover, in the UK, the size of the banking industry relative to GDP is currently about TEN TIMES the 1960s level, and it is unclear what benefits we derive from that bloated banking industry. Thus the slight contraction in the banking industry that would occur under FR would probably do no harm. This book is split into three sections. Section one sets out the basic nature of FR. Section two deals with the very large number of objections which have been made against FR. Most of these objections, even though they are put by so called professional economists, are very silly. No knowledge of economics is needed to rebut them: just common sense. In contrast, some objections are more plausible, though actually flawed. But that is not to say that the ADVOCATES of FR are perfect: section three of the book deals with some popular but flawed arguments put FOR full reserve. A final and interesting characteristic of FR is thus. Under the existing system, the large majority of money in circulation originates with commercial banks, not government or the central bank. In contrast, under FR all money is issued by the central bank. There has actually been a huge rise in the proportion of our money supply originating with central banks as a result of quantitative easing in recent years. That does not seem to have caused big problems.
Author: Mr.Jaromir Benes
Publisher: International Monetary Fund
ISBN: 1475505523
Category : Business & Economics
Languages : en
Pages : 71
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Book Description
At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.
Author: Mr.Simon Gray
Publisher: International Monetary Fund
ISBN: 1455217905
Category : Business & Economics
Languages : en
Pages : 57
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Book Description
Most central banks oblige depository institutions to hold minimum reserves against their liabilities, predominantly in the form of balances at the central bank. The role of these reserve requirements has evolved significantly over time. The overlay of changing purposes and practices has the result that it is not always fully clear what the current purpose of reserve requirements is, and this necessarily complicates thinking about how a reserve regime should be structured. This paper describes three main purposes for reserve requirements - prudential, monetary control and liquidity management - and suggests best practice for the structure of a reserves regime. Finally, the paper illustrates current practices using a 2010 IMF survey of 121 central banks.
Author: Irving Fisher
Publisher: Pickering & Chatto Publishers
ISBN:
Category : Banks and banking
Languages : en
Pages : 328
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Book Description
Author: Joseph Huber
Publisher: Springer
ISBN: 3319421743
Category : Business & Economics
Languages : en
Pages : 212
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Book Description
In coming to terms with the still smoldering financial crisis, little attention has been paid to the flaws within our monetary system and how these flaws lie at the root of the crisis. This book provides an introduction and critical assessment of the current monetary system. It begins with an up to date account of the workings of today’s system of state-backed ‘bankmoney’, illustrating the various forms and issuers of money, and discussing money theory and fallacy past and present. It also looks at related economic challenges such as inflation and deflation, asset inflation and bubble building that lead to market instability and examines the ineffectual monetary policies and primary credit markets that are failing to reach some sort of self-limiting equilibrium. In order to fix our financial system, we first need to understand its limitations and the flaws in current monetary and regulatory policy and then correct them. The concluding part of this book is dedicated to the latter, advocating a move towards the sovereign monetary prerogatives of issuing the entire stock of official money and benefitting from the gain thereof (seigniorage). The author argues that these functions should be made the sole responsibility of independent and impartial central banks with full control over the stock of money (not the uses of money) on the basis of a legal mandate that would be more detailed than is the case today. This includes a thorough separation of monetary and fiscal powers, and of both from banking and wider financing functions. This book provides a welcome addition to the banking literature, guiding readers through the inner workings of our monetary and regulatory environments and proposing a new way forward that will better protect our economy from financial instability and crisis.
Author: Laurence J. Kotlikoff
Publisher: John Wiley & Sons
ISBN: 1118011333
Category : Business & Economics
Languages : en
Pages : 278
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Book Description
Discover how the global financial plague is poised to return, and what can be done to stop it This is not your father's financial system. Jimmy Stewart, the trustworthy, honest banker in the movie, It's a Wonderful Life, is dead. And so is his small-town bank, Bailey Savings & Loan. Instead, we're watching It's a Horrible Mess with Wall Street (aka the Vegas Strip) playing ever larger craps with our economy and our tax dollars. This book, written by one of the world's most respected economist, describes in lively, humorous, simple, but also deadly serious terms the big con underlying the big game?the web of interconnected financial, political, and regulatory malfeasance that culminated in financial meltdown and brought us to our economic knees. But it also proposes an amazingly simply solution?Limited Purpose Banking to make Wall Street safe for Main Street. This book, as well as the financial fix described within it, have received rave reviews from a veritable who's who of policymakers and economics, plus five economics Nobel Laureates Written by a leading economist whose insights on this topic are unparalleled Outlines the first and only proposal to fundamentally fix our financial disaster for good Jimmy Stewart Is Dead will fundamentally change the way you think about the economy, financial markets, and the government.
Author: Board of Governors of the Federal Reserve System
Publisher:
ISBN: 9780894991967
Category : Banks and Banking
Languages : en
Pages : 0
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Book Description
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Author: Jason Apollo Voss
Publisher: SelectBooks, Inc.
ISBN: 1590792416
Category : Business & Economics
Languages : en
Pages : 415
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Book Description
"Successful Wall Street fund manager retired at age 35 guides investors to use intuitive and creative right-brained processes to complement traditional left-brain financial analysis. Author describes his principles based on spiritual insights and provides professional anecdotes to support his. theories"--Provided by publisher.
Author: Josh Ryan-Collins
Publisher:
ISBN: 9781908506542
Category : Banks and banking
Languages : en
Pages : 186
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Book Description
Based on detailed research and consultation with experts, including the Bank of England, this book reviews theoretical and historical debates on the nature of money and banking and explains the role of the central bank, the Government and the European Union. Following a sell out first edition and reprint, this second edition includes new sections on Libor and quantitative easing in the UK and the sovereign debt crisis in Europe.
Author: Paul Hawken
Publisher: Penguin
ISBN: 1524704652
Category : Science
Languages : en
Pages : 258
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Book Description
• New York Times bestseller • The 100 most substantive solutions to reverse global warming, based on meticulous research by leading scientists and policymakers around the world “At this point in time, the Drawdown book is exactly what is needed; a credible, conservative solution-by-solution narrative that we can do it. Reading it is an effective inoculation against the widespread perception of doom that humanity cannot and will not solve the climate crisis. Reported by-effects include increased determination and a sense of grounded hope.” —Per Espen Stoknes, Author, What We Think About When We Try Not To Think About Global Warming “There’s been no real way for ordinary people to get an understanding of what they can do and what impact it can have. There remains no single, comprehensive, reliable compendium of carbon-reduction solutions across sectors. At least until now. . . . The public is hungry for this kind of practical wisdom.” —David Roberts, Vox “This is the ideal environmental sciences textbook—only it is too interesting and inspiring to be called a textbook.” —Peter Kareiva, Director of the Institute of the Environment and Sustainability, UCLA In the face of widespread fear and apathy, an international coalition of researchers, professionals, and scientists have come together to offer a set of realistic and bold solutions to climate change. One hundred techniques and practices are described here—some are well known; some you may have never heard of. They range from clean energy to educating girls in lower-income countries to land use practices that pull carbon out of the air. The solutions exist, are economically viable, and communities throughout the world are currently enacting them with skill and determination. If deployed collectively on a global scale over the next thirty years, they represent a credible path forward, not just to slow the earth’s warming but to reach drawdown, that point in time when greenhouse gases in the atmosphere peak and begin to decline. These measures promise cascading benefits to human health, security, prosperity, and well-being—giving us every reason to see this planetary crisis as an opportunity to create a just and livable world.
