Forty Defective Criticisms of Full Reserve Banking

Ralph S. MUSGRAVE

Abstract


Abstract. The basics of full reserve banking (FR) are set out below, followed by forty defective criticisms of FR. Each of those forty sections has: 1. A heading. 2. Where the heading does not adequately capture the nature of the criticism, there is a paragraph below the heading starting “I.e…”, which expands on the heading. 3. There are references to one or more economists who have put the relevant criticism. 4. The answer to each criticism which starts with a paragraph beginning with the word “Answer.” And finally, this work is an updated version of Musgrave (2014). About 90% of the content of this and the latter work are the same. Abbreviations used are thus. CB refers to “Central bank” and PB refers to private bank. The term “commercial bank” would be more accurate than private bank since a commercial bank can perfectly well be publically owned. But the words central and commercial unfortunately both begin with “c”. Thus the term “private bank” is arguably better. The word bank on its own refers to a PB.

Keywords. Full reserve banking, Fractional reserve banking.

JEL. E58, G01, G21.

Keywords


Full reserve banking; Fractional reserve banking.

Full Text:


References


Aziz, J. (2014). Prohibition didn't work for liquor - so why ban banking? The Week. [Retrieved from].

Bagehot, W. (1873). Lombard Street.Cirencester. The Echo Library.

Brown, G. (2013). Stumbling Towards the Next Crash. New York Times. [Retrieved from].

Cochrane, J.H. (2013) Stopping Bank Crises Before They Start. Hoover Institution, Stanford University. [Retrieved from].

Corporate Europe Observatory. (2014). The firepower of the financial lobby. [Retrieved from].

Diamond, D.W., & Dybvig, P.H. (1986). Banking theory, deposit insurance and bank regulation. Journal of Business, 59(1), 55-68. doi. 10.1086/296314

Dowd, K. (2014). Let's not ban private money. Free Banking. [Retrieved from].

Dyson, B., & Jackson, A. (2013). Modernising Money. Positive Money Pub.

Dyson, B. (2016) Bank of England: Digital Cash – the end of monetary policy as we know it? Positive Money. [Retrieved from].

Elliot, D.J. (2013). Higher Bank Capital Requirements Would Come at a Price. Brookings Institution. [Retrieved from].

Fisher, R. (2013). Ending 'Too Big to Fail': A Proposal for Reform Before It's Too Late. Federal Reserve Bank of Dallas. [Retrieved from].

Fontana, G., & Sawyer, M. (2016). Full Reserve Banking: More ‘Cranks’ Than Brave Heretics. Cambridge Journal of Economics. doi.10.1093/cje/bew016

Friedman, M. (1960). A Program for Monetary Stability. New York: Fordham University Press.

Graziani, A. (2003). The Monetary Theory of Production, Cambridge, Cambridge University Press.

Huber, J., & Robertson, J. (2000). Creating New Money. New Economics Foundation. [Retrieved from].

King, M. (2010). Banking from Bagehot to Basel and Back Again. Second Bagehot Lecture given at the Buttonwood Gathering, New York City. [Retrieved from].

Kotlikoff, L. (2012). The Economic Consequences of the Vickers Commission. London. Civitas. [Retrieved from].

Kregel, J. (2012). Minsky and the narrow banking proposal. Levy Economics Institute of Bard College, Public Policy Brief, No.125, 2012. [Retrieved from].

Krugman, P. (2014). Is a Banking Ban the Answer?New York Times. [Retrieved from].

Levitin, A.J. (2015) Safe Banking. University of Chicago Law Review, 83(1), 14. doi. 10.2139/ssrn.2532703

Lonergan, E. (2016). Debt-free money: a brief reply to Randall Wray.Philosophy of Money. [Retrieved from].

Mathaison, N., Newman, & McClenaghan, M. (2012). Revealed: The £93m City lobby machine.Bureau of Investigative Journalism. [Retrieved from].

Musgrave, R.S. (2014) Forty two flawed arguments for and against full reserve banking. Munich Personal RePEc Archive. [Retrieved from].

Niepelt, D. (2016) Presentation for ‘Contemplating the end of fractionalreserve banking for Switzerland.’ CFA Institute. [Retrieved from].

Pettifor, A. (2014). Why I disagree with Martin Wolf and Positive Money. Open Democracy UK. [Retrieved from].

Rowbotham, M. (1998). The Grip of Death. Jon Carpenter, Oxfordshire.

Schiller, R. (2014). The Financial Fire Next Time. Project Syndicate. [Retrieved from].

Selgin, G. (1988). The Theory of Free Banking. Lanham. Rowman & Littlefield. [Retrieved from].

SEC, (2014). SEC adopts money market reform rules. [Retrieved from].

Sumner, S. (2013). Why the Fiscal Multiplier is Roughly Zero. Mercatus Centre. [Retrieved from].

Turner, A. (2012). Monetary and Financial Stability: Lessons from the Crisis and from classic economics texts. Speech at South African Reserve Bank. [Retrieved from].

Van Dixhoorn, C. (2013). Full Reserve Banking. Sustainable Finance Lab. [Retrieved from].

Vickers, J. (2011). Independent Commission on Banking Final Report. [Retrieved from].

White, L.H. (2003). Accounting for Fractional -Reserve Banknotes and Deposits- or, What’s Twenty Quid to the Bloody Midland Bank? Independent Review, 7(3), 423-441.

Warner, J. (2014). Bankers have done a good job of creating money. London. Daily Telegraph. [Retrieved from].

Werner, R., Dyson, B. Greenham, T. Ryan-Collins, J., (2011). Towards A Twenty - first Century Banking And Monetary System.’ Positive Money, NEF and the University of Southampton. [Retrieved from].

Wolf, M. (2012). Seven ways to clean up our banking cesspit. London. Financial Times. (July 12). [Retrieved from].

Wolf, M. (2013). Why bankers are intellectually naked. Financial Times. [Retrieved from].

Wray, L.R. (2015). Debt-free money and banana republics. New Economic Perspectives. [Retrieved from].




DOI: http://dx.doi.org/10.1453/jel.v3i3.923

Refbacks

  • There are currently no refbacks.


.......................................................................................................................................................................................................................................................................................................................................

Journal of Economics Library - J. Econ. Lib. - JEL - www.kspjournals.org

ISSN: 2149-2379

Editor: [email protected] Secretarial: [email protected]   Istanbul - Turkey.

Copyright © KSP Library