Deposits, Loans, and Banking: Clarifying the Debate
2013; Wiley; Volume: 72; Issue: 3 Linguagem: Inglês
10.1111/ajes.12023
ISSN1536-7150
AutoresPhilipp Bagus, David Howden, Walter E. Block,
Tópico(s)Banking stability, regulation, efficiency
ResumoThe American Journal of Economics and SociologyVolume 72, Issue 3 p. 627-644 Original Article Deposits, Loans, and Banking: Clarifying the Debate Philipp Bagus, Philipp Bagus Philipp.bagus@urjc.es Search for more papers by this authorDavid Howden, David Howden dhowden@slu.edu Search for more papers by this authorWalter Block, Walter Block wblock@loyno.edu Search for more papers by this author Philipp Bagus, Philipp Bagus Philipp.bagus@urjc.es Search for more papers by this authorDavid Howden, David Howden dhowden@slu.edu Search for more papers by this authorWalter Block, Walter Block wblock@loyno.edu Search for more papers by this author First published: 01 July 2013 https://doi.org/10.1111/ajes.12023Citations: 21Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Abstract The relationship between banking deposits and loans is contentious. While the defense of a 100 percent reserve clause to eliminate fractional reserves has commonly been asserted on economic and ethical grounds, Huerta de Soto (2006) arguments are largely ignored. Rozeff (2010) is an example. We show that treating a loan and a deposit interchangeably is impermissible due to both established and a priori legal principles. At best, fractional reserves may be considered an aleatory contract but this is incompatible with the reason individuals hold money—mitigating uncertainty. Deposit and loan contracts are distinct, and may not be contractually melded together. Citing Literature Volume72, Issue3July 2013Pages 627-644 RelatedInformation
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