Bank of England teeb seda jälle :)

Working Paper No. 529: Banks are not intermediaries of loanable funds – and why this matters – Zoltan Jakab and Michael Kumhof

Since the Great Recession, banks have increasingly been incorporated into macroeconomic models. However, this literature confronts many unresolved issues. This paper shows that many of them are attributable to the use of the intermediation of loanable funds (ILF) model of banking. In the ILF model, bank loans represent the intermediation of real savings, or loanable funds, between non-bank savers and non-bank borrowers. But in the real world, the key function of banks is the provision of financing, or the creation of new monetary purchasing power through loans, for a single agent that is both borrower and
depositor. The bank therefore creates its own funding, deposits, in the act of lending, in a transaction that involves no intermediation whatsoever. Third parties are only involved in that the borrower/depositor needs to be sure that others will accept his new deposit in payment for goods, services or assets. This is never in question, because bank deposits are any modern economy’s dominant medium of exchange. Furthermore, if the loan is for physical investment purposes, this new lending and money is what triggers investment and therefore, by the national accounts identity of saving and investment (for closed economies), saving. Saving is therefore a consequence, not a cause, of such lending. Saving does not finance investment, financing does. To argue otherwise confuses the respective macroeconomic roles of resources (saving) and debt-based money (financing).

Mis ma oskan öelda? Hea on lugeda inimesi, kes pangafinantsidest aru saavad. Nad räägivad, et tuleks see integreerida DSGE mudelitesse. Need mudelid on kahjuks rämps, et selles suhtes ollakse valel teel, aga ega selles töös sellega ei tegeleta, et igati väärt lugemine.

Loe seda uuesti: Saving does not finance investment, financing does. To argue otherwise confuses the respective macroeconomic roles of resources (saving) and debt-based money (financing).


ja järjest paremaks läheb:

The fundamental reason for these differences is that savings in the ILF( intermediation of loanable funds) model of banking need to be accumulated through a process of either producing additional goods or foregoing consumption of existing goods, a physical process that by its very nature is slow and continuous. On the other hand, FMC(financing through money creation) banks that create purchasing power can technically do so instantaneously and discontinuously, because the process does not involve physical goods, but rather the creation of money through the simultaneous expansion of both sides of banks’ balance sheets. While money is essential to facilitating purchases and sales of real resources outside the banking system, it is not itself a physical resource, and can be createdat near zero cost. In other words, the ILF model is fundamentally a model of banks as barter institutions, while the FMC model is fundamentally a model of banks as monetary institutions.

Ja reservide ning “keskpanga raha” kohta:

This finally takes us to the venerable deposit multiplier (DM) model of banking, which suggests that the availability of central bank high-powered money imposes another limit to rapid changes in the size of bank balance sheets. The DM model however does not recognise that modern central banks target interest rates, and are committed to supplying as many reserves (and cash) as banks demand at that rate. The quantity of reserves is therefore a consequence, not a cause, of lending and money creation.

Rahakordaja müüt pannakse magama. Mõned aastat tagasi rääkis Krugman veel rahakordajast. Kui palju me oleme kuulnud “majandustarkade” juttu, et keskpank ostab valitsuse võlakirju, andes pankadele reserve, lootuses, et need hakkavad siis laenama. Selgub, et see on vale.  Kogu mainstream makro on tegelikult vale. Otseselt vast MMT-ga siin tegemist ei ole, kuna MMT komplimenteerib Monetary circuit theory’t  Samas on see ikkagi MMT kui postkeinsistliku teooria osa. Lihtsalt MMT ja MMT-lased tavaliselt eriti palju ei räägi sellest “kommertspankade rahaloomest”, sest see on suht lihtne, leierdatud ja mõneti ehk lasteaia teema nende jaoks.

Igal juhul on mul väga hea meel, et midagi adekvaatset jälle ilmus.

But there’s got to be an opening
Somewhere here in front of me
Through this maze of ugliness and greed


About Kristjan

Defitsiidi terrorismi vastase pataljoni eriüksuslane (finantsignorantsuse vastu võitlemise osakond). Treening: MMT, postkeinsism, Tartu Ülikool Majandusteadus
Rubriigid: English, Estonian. Salvesta püsiviide oma järjehoidjasse.

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