Social Democracy for the 21st Century: A Post Keynesian Perspective Thu 2010-07-22 16:00 EDT
Fractional Reserve Banking: An Evil?
Hostility to fractional reserve banking is ubiquitous. The Austrians hate it and regard it as a type of fraud. There are even a good many people on the left who despise fractional reserve banking as an evil institution. However, a careful look at fractional reserve banking suggests that it is not necessarily a problem with modern fiat money, a well-regulated financial system, deposit insurance and a central bank ready as the lender of last resort. Fractional reserve banking without these safeguards can be extremely destabilizing and has often led to disastrous bank collapses and depressions...
21st century; evil; fractional reserve banking; Post Keynesian Perspective; social democracy.