Finally, how about 100 percent reserve regulations?

Finally, how about 100 percent reserve regulations?

The Bundesbank paper notes the strain into the debate that is public you can find requires a 100 percent book system become imposed as an element of banking reform.

The claim is the fact that by restricting the credit creation capability of banks (the reserve that is fractional noted above), the banking institutions will be more stable and there is less possibility of crisis.

Therefore if banks needed to usually have reserves equal for their loan guide then security will be improved.

Nevertheless the Bundesbank is really as on to that particular nonsense as MMT is. [Read more…]