Topic updates
How the magic money tree works

30th October 2017
This is essential background reading for ALL students taking a unit in basic financial economics!
Nearly four fifths of MPs do not know how money is created with the majority holding the mistaken belief that money is created by the government.
Zoe Williams explains in this Guardian article that new money is created whenever a commercial bank extends a loan, and they don't have to attract deposits first in order to do this!
"Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold."
How is money created? https://t.co/JezBOSbI8T
— Oxford Economics (@OUPEconomics) October 30, 2017
How the actual magic money tree works - https://t.co/qnmDZUBtBy
— Positive Money (@PositiveMoneyUK) October 30, 2017
You might also like

Co-Op Bank fails Bank of England stress test
16th December 2014

Martin Wolf on Global Shifts and Shocks
6th February 2015

Greek bank deposits fall to 10 year low
30th May 2015

Guaranteed bank deposits and the market for lemons
8th July 2015
Monetary Policy - Managing Demand
Study Notes

Payday lenders subject to an interest rate cap
17th November 2014