Reforms in China’s Monetary Policy Reforms in China’s Monetary
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| Figure 1.2
“Direct financing” and “indirect financing.” Note: Here the arrows simply indicate the monetary relations between and among the three par- ties, and do not suggest that the banks give the so-called “funds” to the customers. Monetary Theory ● 27 excess money is not so-called source of bank loans, instead they are created by loans extended to those who lack money. Banks can only make loans to those who lack money, and the deposits created in this process are then scattered in the society by the payment behaviors of those who lack money to purchase goods or services. Thus those people with excess money will have their deposit assets. 6 There is no such thing as banks transfer funds from those with excess money to those who lack it. This is because banks have a special credit status. In the credit monetary system, banks and clients are not at the same credit level. For clients, deposits are their assets, which can be used for transactions with other clients. For banks, deposits are their liabilities, and banks cannot possibly use the deposits as a tool to trade with their clients. Therefore banks are not the intermediary but the source of social funds. For clients, borrowing from banks is different from borrowing from other clients. But this difference has nothing to do with direct and indirect financ- ing. First of all, clients obtaining deposit money though bank loans has nothing to do with people who have excess money. It is a direct transaction between the two parties. Second, the borrowing and lending tools between clients are banks’ liabilities, which is also related to banks. Moreover, in the “chain of indirect financing” in the conventional money theory, there is an asset accepted by the three parties, whereas there is no such asset in reality. The essential difference between the two theories is the difference in levels. The so- called direct financing is the transaction of bank liabilities between the non- bank public, which only changes the owner of money and does not affect the amount of money. The so-called indirect financing indicates that banks create money through loans, leading to an increase of money; so indirect financing does not need to have a source of funds. tải về 1.53 Mb. Chia sẻ với bạn bè của bạn:
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