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Financial intermediation

Some Clarity on Banks as Financial Intermediaries and Money 'Creators'

Robert W Vivian and Nicholas Spearman
Although the phrase ‘banks create money’ forms part of popular discourse, it has precipitated a factually incorrect understanding of a bank’s role in the money creation process. Bank money creation is the result of an underlying value-for-value exchange transaction; the bank facilitates the...
Jun 2015
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Credit spread variability in U.S. business cycles: The Great Moderation versus the Great Recession

Hylton Hollander and Guangling Liu
This paper establishes the prevailing financial factors that influence credit spread variability, and its impact on the U.S. business cycle over the Great Moderation and Great Recession periods. To do so, we develop a dynamic general equilibrium framework with a central role of financial...
Aug 2014
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