Book contents
- A Great Deal of Ruin
- A Great Deal of Ruin
- Copyright page
- Contents
- Tables
- Preface
- I Introduction
- Part I Financial Crises
- Part II Five Case Studies
- Part III Lessons
- 8 Markets Do Not Self-Regulate
- 9 Shadow Banks are Banks
- 10 Banks Need More Capital, Less Debt
- 11 Monetary Policy Does Not Always Work
- 12 Fiscal Multipliers Are Larger Than Expected
- 13 Monetary Integration Requires Fiscal Integration
- 14 Open Capital Markets Can Be Dangerous
- 15 Not All Debt Is Created Equal
- Conclusion
- Abbreviations and Acronyms
- Bibliography
- Index
10 - Banks Need More Capital, Less Debt
from Part III - Lessons
Published online by Cambridge University Press: 05 August 2019
- A Great Deal of Ruin
- A Great Deal of Ruin
- Copyright page
- Contents
- Tables
- Preface
- I Introduction
- Part I Financial Crises
- Part II Five Case Studies
- Part III Lessons
- 8 Markets Do Not Self-Regulate
- 9 Shadow Banks are Banks
- 10 Banks Need More Capital, Less Debt
- 11 Monetary Policy Does Not Always Work
- 12 Fiscal Multipliers Are Larger Than Expected
- 13 Monetary Integration Requires Fiscal Integration
- 14 Open Capital Markets Can Be Dangerous
- 15 Not All Debt Is Created Equal
- Conclusion
- Abbreviations and Acronyms
- Bibliography
- Index
Summary
Banks take deposits – other people’s money – which they use to fund their own activities. Bank deposits are loans by depositors and a form of bank debt, even if most people with checking accounts probably do not think about the fact that they are loaning money to a bank. Deposits are the primary source of funding for most retail banks, which also have other sources of funding, including capital invested by the bank owners or shareholders, and loans from sources other than depositors. Taken together, deposits, other borrowed money, and capital, make up the liabilities side of the bank balance sheet.
- Type
- Chapter
- Information
- A Great Deal of RuinFinancial Crises since 1929, pp. 212 - 223Publisher: Cambridge University PressPrint publication year: 2019