The Myth of Fractional Reserve Banking

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Three Busi­ness Spec­ta­tor read­ers con­tact­ed me direct­ly about one top­ic last week – bank mon­ey cre­ation, and how bank reserves work. Fol­low­ing an old jour­nal­ism adage that three direct enquiries about a top­ic from the pub­lic means that everybody’s inter­est­ed in it, I’m div­ing into wonkdom to answer their queries in detail here. Ignore this post if the adage isn’t true for you, but if it is and you haven’t yet had your morn­ing Java, now’s the time for that stroll to the barista.

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.