How banks create and destroy money – A guide to the Eurozone monetary system

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Screen Shot 2013-01-16 at 17.30.03This publication by Sensible Money demonstrates the accountancy procedures by which banks create and destroy the vast majority of the Eurozone’s money. It also explains how money is transferred domestically and throughout the Eurozone as well as procedures like quantitative easing and how the ECB attempts to implement its monetary policy.

It has been adapted to the euro-system from UK-specific guides on the UK monetary and banking system.

Read here 


Here is also a more detailed and quite technical version of this document. It assumes some prior knowledge of accountancy and economics. It describes how the system actually runs and then analysis how incomplete the money multiplier model of banking is at describing the money creation process.



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  • Ralph Musgrave

    The “read here” link doesn’t seem to work. But congratulations on publishing a guide to the Eurozone monetary system: that is needed.

    There is an academic at Lancaster University who is an expert on that subject: John Whittaker. Perhaps Positive Money could get him to write a guide to the Euro monetary system to compliment the above Sensible Money one?

  • Mike

    Congrats! When read the guide I intend sharing it on facebook LetsTrade (Cork). Cork LETS is growing daily – bringing human relations back into economic activity. Their Community Account acts as a Liquidity A/c for the system. Watch that space!

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