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Financial Stability and Money Creation

Financial Stability and Money Creation AbstractShould money issuance be a licensed privilege, and if so, who should issue money? Morgan Ricks argues that free-wheeling money issuance by non-licensed shadow banks was a major factor behind the global financial crisis. Still, the regulatory reform agenda after the crisis has mostly been directed at banks (with a few exceptions). This has led to an enormously complex body of regulations that threatens to bring traditional banking to its knees. Ricks would instead restore money issuance as a privilege and leave other financial institutions with a lighter regulatory regime. He is not, however, in favor of narrow banking – as favored by Irving Fisher – but would leave credit allocation with the private banking sector. In this way his proposals are both radical and conservative. He brings a refreshing look to the regulatory debate, and the book is full of novel insights. His discussion of banks and deposit regulations should be required reading for all bank regulators, although his proposal may fall on barren ground in the current political environment. Nevertheless, the book should serve both as a primer for future monetary reform proposals, but also as a starting point for a pragmatic bipartisan debate about financial reform today. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting, Economics and Law de Gruyter

Financial Stability and Money Creation

Moe, Thorvald Grung
Accounting, Economics and Law , Volume 8 (2): 1 – Jul 10, 2018
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16 pages

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Publisher
de Gruyter
Copyright
© 2018 Walter de Gruyter GmbH, Berlin/Boston
ISSN
2151-2820
eISSN
2152-2820
DOI
10.1515/ael-2018-0010
Publisher site
See Article on Publisher Site

Abstract

AbstractShould money issuance be a licensed privilege, and if so, who should issue money? Morgan Ricks argues that free-wheeling money issuance by non-licensed shadow banks was a major factor behind the global financial crisis. Still, the regulatory reform agenda after the crisis has mostly been directed at banks (with a few exceptions). This has led to an enormously complex body of regulations that threatens to bring traditional banking to its knees. Ricks would instead restore money issuance as a privilege and leave other financial institutions with a lighter regulatory regime. He is not, however, in favor of narrow banking – as favored by Irving Fisher – but would leave credit allocation with the private banking sector. In this way his proposals are both radical and conservative. He brings a refreshing look to the regulatory debate, and the book is full of novel insights. His discussion of banks and deposit regulations should be required reading for all bank regulators, although his proposal may fall on barren ground in the current political environment. Nevertheless, the book should serve both as a primer for future monetary reform proposals, but also as a starting point for a pragmatic bipartisan debate about financial reform today.

Journal

Accounting, Economics and Law – de Gruyter

Published: Jul 10, 2018

References

  • Financial innovation and deregulation in perspective
  • Bernanke: “I don’t know” which foreign banks got half trillion U.S. Dollars
  • Money creation in the modern economy
  • Digital base money -an assessment from the European central bank’s perspective
  • Commentary on “proposals for financial restructuring”
  • Commentary on “proposals for financial restructuring”
  • Traditional Banks, Shadow Banks and the US Credit Boom – Credit Origination versus Financing
  • Are banks still special? in bank of England
  • The importance of money
  • The crisis as a classic financial panic
  • Financial innovation and deregulation in perspective