The Basel Capital Accord

Geoffrey W. Gardiner

Chapter 8 in The Evolution of Creditary Structures and Controls, 2006, pp 101-113 from Palgrave Macmillan

Abstract: Abstract IF THE FRACTIONAL RESERVE THEORY described in Chapter Five is a technical error, is there any effective restriction on bank lending? Yes there is. As we have already seen the amount a bank can lend is a function of its capital base, and the capital base can be neutered by raising capital adequacy ratios, or the growth of the capital base can be regulated. The latter would be very controversial. This is the first truth about the money supply.

Keywords: Money Supply; European Central Bank; Bank Lending; Capital Base; Capital Adequacy (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1057/9780230288447_8

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