问答题 Expansion of Money by Banks
Banks are permitted to create money out of "multiple expansion of bank deposits." They generate about five dollars of new money for every dollar of reserves. Let us suppose that a person brings $100 into a bank for deposit. If the bank were to hold 100 percent reserves, it would keep the total amount in the vault. However, as we have learned, the law requires that only a small percentage be kept. Let us assume the amount required at this time is 20 percent. With the $80 that does not have to be deposited with the Federal Reserve, the bank may buy government bonds and lend the money, thus assisting business expansion, making mortgages on property, and the like. Note that the depositor still has $100 in the bank, but the bank, in turn, has created $80 of new money by lending it.
The person who borrowed the $80 will probably deposit some or all of the money in the same bank or in some other bank: what is not deposited immediately will probably be spent and subsequently deposited in another bank. Eventually then the banking system receives a total of $80 in the new deposits—the $80 that was borrowed from the first bank. As in the first instance, the other banks, referred to as second-generation banks, keep only 20 percent of the new $80, or $16, and loan out $64. And so it continues, as each later generation bank retains 20 percent and offers the new 80 percent for loan. Through this chain process, the banking system eventually ends up with total deposits equal to five times the original $100.