Banking 101 (Video Course) » Posi­tive Money

There’s a lot of con­fu­sion about how banks work, most uni­ver­sity eco­no­mics cour­ses still teach a model of banking that doesn’t apply to the real world. While banking may seem like a com­pli­ca­ted sub­ject, any­one can learn the basics.

Do you really want to under­stand how banks cre­ate money, and what limits their abi­lity to do so? Then our 6-​​part video course ‘Banking 101′ is for you!

via Banking 101 (Video Course) » Posi­tive Money.


Part 1: Miscon­cep­tions Aro­und Banking

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Before we discover how banks really work, and how money is cre­a­ted, first to clear up any con­fu­sion, we need to see what’s wrong about the way that most people think banks work.


Part 2: What’s Wrong with the Money Mul­ti­plier model?

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Most of these stu­dents and gra­du­a­tes get taught about somet­hing cal­led the ‘money mul­ti­plier’. In this video we’ll show that it’s an inac­cu­rate and out­da­ted way of descri­bing how the banking system works.


Part 3: How Money is Really Cre­a­ted by Banks

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In this new video you can learn how com­mercial banks can cre­ate money through the acco­un­ting pro­cess they use when they make loans, how banks make pay­ments between each other using spe­ci­ally cre­a­ted cen­tral bank money, if the Bank of Eng­land really can con­trol how much money is in the eco­nomy …and more.


Part 4: How much money can banks create?

4 B101

What actu­ally limits how much money the banks can cre­ate? Reserve ratios, Liqui­dity ratios, Capi­tal Adequacy Ratios and/​or the Basel accords? Explai­ned in an easy to under­stand way.


Part 5: Do banks cre­ate ‘money’ or just ‘credit’?

5 B101

You might hear some people say that “Banks don’t cre­ate money – they just cre­ate cre­dit”. This response often comes from civil ser­vants and people trying to deny that banks now cre­ate the nation’s entire money sup­ply. So let us show you why the num­bers that banks cre­ate are money, and not just ‘credit’.


Part 6: How money gets destroyed

6 B101

Remem­ber how new money is cre­a­ted when a bank makes a loan? Well, when someone repays the loan, the oppo­site pro­cess hap­pens, and money is actu­ally destroyed. It effecti­vely dis­ap­pears from the eco­nomy enti­rely. This video explains how.

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