Some economists of the Austrian school oppose fractional-reserve banking on the grounds that it is inherently fraudulent, pro-cyclical and unstable. These critics should focus their wrath on repressive financial legislation and central-bank mischief, not on a legitimate practice that encourages savings and investment.
Should We Let Banks Create Money?
By George A. Selgin
This
article
appeared in
the Summer 2000 issue of The Independent Review.
Banking and FinanceBanking Law and RegulationEconomic PolicyEconomyFiscal Policy/DebtLaw and Liberty
Other Independent Review articles by George A. Selgin | |
Fall 2013 | The Financial Crisis and the Free Market Cure:Why Pure Capitalism Is the World Economys Only Hope |
Summer 2011 | They Stumble Who Run Fast:Roubini and Mihms Crisis Economics |
Spring 2010 | Central Banks as Sources of Financial Instability |