Virtual currency deposit creation
Publish: 2021-05-12 15:44:59
1. Under the condition that the statutory deposit reserve rate is 10%, company a deposits 10 million cash into bank a, bank a leaves 10% of the statutory reserve, and the rest is loaned to company B, Then the balance sheet of bank a is: the legal reserve of assets and liabilities is 1 million yuan, deposit (company a) is 10 million yuan, loan (company B) is 9 million yuan, total is 10 million yuan, total is 10 million yuan. When company B gets the 9 million yuan loan, it pays the loan to company C, company C deposits the 9 million yuan into bank B, after bank B leaves the legal reserve, the rest is lent to company D, Then the balance sheet of bank B is as follows: the legal reserve of assets and liabilities is 900000 yuan, deposit (company C) is 900000 yuan, loan (company d) is 8100000 yuan, total 9000000 yuan, total 9000000 yuan. After receiving 8100000 yuan loan, company D pays to company E for payment, and company e deposits 8100000 yuan to bank C... Commercial banks create money in this way of deposit - Loan - re deposit - re loan. It can be seen that every time a commercial bank issues a loan, the deposit currency will be expanded.
2. Deposit money creation means that the same currency can become several times of its own deposit. Mainly through the deposit, withdrawal, re deposit and re withdrawal process of deposit and loan activities, the same currency becomes several times of deposit currency<
process of deposit currency creation:
how does the same currency create multiple deposit currencies? This is "if the original owner of money a buys money from B, B buys money from C, C buys money from D, D buys money from e, and e buys money from F," that is, money will stay for a long time when it is transferred from one person's hand to another just because of the real transaction as a medium. This is the case when there is no credit intervention, money is used as a simple means of circulation, B deposits the money paid by a to his banker, who lends it to C for the discount of C's bill of exchange. C buys it from D, D deposits it to his banker, who then lends it to e, and e buys it from F. then, the speed of money as a simple means of circulation (purchasing means) itself depends on multiple credit activities: B deposits money with his banker, The banker discounts C, D deposits with his banker, and the banker discounts E; That is to say, it can decide four credit activities. Without these credit activities, the same currency would not be purchased five times in a certain period of time
the above is how the same banknote can form a deposit without going to the banker. Similarly, it will form a different deposit with a banker. This bank uses the banknotes deposited by a to discount B's draft; B pays C, and C deposits the same banknote in the hand of the banker who issued it
the creation of deposit and loan currency is not unlimited. As mentioned above, it is restricted by deposit reserve ratio and cash leakage rate. However, after multiple deposits and loans, the total amount of money deposited by banks can be multiplied.
process of deposit currency creation:
how does the same currency create multiple deposit currencies? This is "if the original owner of money a buys money from B, B buys money from C, C buys money from D, D buys money from e, and e buys money from F," that is, money will stay for a long time when it is transferred from one person's hand to another just because of the real transaction as a medium. This is the case when there is no credit intervention, money is used as a simple means of circulation, B deposits the money paid by a to his banker, who lends it to C for the discount of C's bill of exchange. C buys it from D, D deposits it to his banker, who then lends it to e, and e buys it from F. then, the speed of money as a simple means of circulation (purchasing means) itself depends on multiple credit activities: B deposits money with his banker, The banker discounts C, D deposits with his banker, and the banker discounts E; That is to say, it can decide four credit activities. Without these credit activities, the same currency would not be purchased five times in a certain period of time
the above is how the same banknote can form a deposit without going to the banker. Similarly, it will form a different deposit with a banker. This bank uses the banknotes deposited by a to discount B's draft; B pays C, and C deposits the same banknote in the hand of the banker who issued it
the creation of deposit and loan currency is not unlimited. As mentioned above, it is restricted by deposit reserve ratio and cash leakage rate. However, after multiple deposits and loans, the total amount of money deposited by banks can be multiplied.
3. 1. Partial reserve system:
also known as legal deposit reserve system, refers to the system that in order to prevent excessive credit creation, the state legally stipulates that the deposits of commercial banks must be turned over to the central bank in a certain proportion as legal deposit reserve, and commercial banks are not allowed to use, while the rest can be used for lending. Therefore, increasing the legal deposit reserve has a strong restrictive effect on the bank's credit ability<
2. Non cash settlement system:
indivials can make monetary payment by writing cheques, and the transactions between banks are settled by transfer without cash. In this way, banks can make loans by keeping accounts, so as to expand credit
in real economic life, the money and loans provided by the bank will proce several times of its deposits through several deposits, loans and other activities. The simple understanding is that the bank issues loans after decting the legal reserves from the deposits (usually time deposits), which improves the utilization efficiency of circulating currency. The faster the circulation speed is, the greater the creativity of the deposit currency is, The less money in circulation is needed, and banks create more money through credit leverage than in actual circulation, which is the creation of deposit money.
also known as legal deposit reserve system, refers to the system that in order to prevent excessive credit creation, the state legally stipulates that the deposits of commercial banks must be turned over to the central bank in a certain proportion as legal deposit reserve, and commercial banks are not allowed to use, while the rest can be used for lending. Therefore, increasing the legal deposit reserve has a strong restrictive effect on the bank's credit ability<
2. Non cash settlement system:
indivials can make monetary payment by writing cheques, and the transactions between banks are settled by transfer without cash. In this way, banks can make loans by keeping accounts, so as to expand credit
in real economic life, the money and loans provided by the bank will proce several times of its deposits through several deposits, loans and other activities. The simple understanding is that the bank issues loans after decting the legal reserves from the deposits (usually time deposits), which improves the utilization efficiency of circulating currency. The faster the circulation speed is, the greater the creativity of the deposit currency is, The less money in circulation is needed, and banks create more money through credit leverage than in actual circulation, which is the creation of deposit money.
4.
A bank opens a current deposit account for business people. The depositor can issue a payment order to the bank based on the deposit - a check, or transfer the deposit to the payee's account by other means. These methods replace money as a means of circulation and payment, so they are called deposit currency or credit currency
the credit currency is the currency guaranteed by the credit of the currency issuer, while the deposit currency is the credit currency guaranteed by the credit status of the savings institution issuing the deposit
extended data:
deposit currency refers to the bank deposit that can play the role of currency, mainly refers to the current deposit that can handle transfer settlement by issuing cheques. Generally speaking, current deposit balance of commercial banks should be regarded as currency, which is usually regarded as "deposit currency"
deposit currency is mainly reflected in the current deposits of units and indivials in bank accounts, which are mainly transferred in the banking system and can be used for transfer settlement. The deposit currency comes from the deposit of cash currency and the derivative mechanism of bank loan
5. 1. Money supply refers to the process in which a country's banking system invests, creates, expands (or contracts) money into the economy in a certain period of time< Under the modern credit monetary system, the process of money supply generally involves four actors: central bank, commercial bank, depositor and borrower. The banking system plays a decisive role in the process of money supply. Money in circulation is supplied by banks, which is closely related to the assets and liabilities activities of central banks and commercial banks< Under the financial system of the central bank system, money supply is injected into circulation through the creation of basic money by the central bank and deposit money by commercial banks. This supply process has three characteristics: first, the main body of money supply is the central bank and commercial banks; ② The two entities create corresponding money respectively. That is, the central bank creates cash currency, and the commercial bank creates deposit currency; ③ Non bank financial institutions have an important impact on money supply< There are three basic conditions in the process of money supply in the banking system: 1. Complete credit currency circulation; 2; ② Carry out the system of deposit reserve; ③ Non cash settlement is widely used< The process of money supply can be divided into two parts: 1. The basic money supply provided by the central bank; 2; ② The creation of deposit money by commercial banks< The basic currency provided by the central bank goes out through its asset business, generally through three channels: (1) buying and selling foreign exchange gold in the foreign exchange market, changing the reserve assets; ② Buying and selling government bonds on the open market, changing the claims on the government; ③ Rediscount or refinance commercial banks and change their claims on financial institutions
7. Base currency refers to the sum of the currency held by the public in the circulation field and the reserves of the banking system. As the basis of deposit expansion and money creation in the whole banking system, its amount has a decisive impact on the total amount of money supply. Base currency = Cash + deposit reserve of banking system
8. The increase of the central bank's creditor's rights to commercial banks means the increase of the central bank's rediscount or refinance assets, which indicates that the base money injected into circulation through commercial banks will increase and lead to multiple expansion of money supply. On the contrary, if the central bank's creditor's rights to commercial banks decrease, it means that the central bank reces rediscount or refinance assets, and the money supply will shrink sharply
9. Money multiplier refers to the multiple relationship between money supply and base money. In the process of money supply, there is a multiplier effect between the initial money supply of the central bank and the final money formation of the society< Currency multiplier is mainly determined by currency deposit ratio and reserve deposit ratio. The currency deposit ratio is the ratio of cash in circulation to current deposits of commercial banks. The higher the currency deposit ratio is, the smaller the money multiplier is; The lower the currency deposit ratio, the greater the currency multiplier. Reserve deposit ratio is the ratio of total reserve to deposit held by commercial banks. Reserve deposit ratio also changes in the opposite direction with money multiplier
11. The endogeneity of money supply means that money supply is difficult to be directly controlled by the central bank, but is determined by all economic entities in the economic system. The exogenous nature of money supply means that money supply can be directly controlled by the central bank outside the economic system
12. China's current money supply has both the generality of market economy and the characteristics of transition economy, which makes money supply coexist in exogenous and endogenous. Generally speaking, the central bank still has a strong control over the money supply, but at the same time, with the deepening of reform and opening up, the endogeneity of money supply is also increasing.
7. Base currency refers to the sum of the currency held by the public in the circulation field and the reserves of the banking system. As the basis of deposit expansion and money creation in the whole banking system, its amount has a decisive impact on the total amount of money supply. Base currency = Cash + deposit reserve of banking system
8. The increase of the central bank's creditor's rights to commercial banks means the increase of the central bank's rediscount or refinance assets, which indicates that the base money injected into circulation through commercial banks will increase and lead to multiple expansion of money supply. On the contrary, if the central bank's creditor's rights to commercial banks decrease, it means that the central bank reces rediscount or refinance assets, and the money supply will shrink sharply
9. Money multiplier refers to the multiple relationship between money supply and base money. In the process of money supply, there is a multiplier effect between the initial money supply of the central bank and the final money formation of the society< Currency multiplier is mainly determined by currency deposit ratio and reserve deposit ratio. The currency deposit ratio is the ratio of cash in circulation to current deposits of commercial banks. The higher the currency deposit ratio is, the smaller the money multiplier is; The lower the currency deposit ratio, the greater the currency multiplier. Reserve deposit ratio is the ratio of total reserve to deposit held by commercial banks. Reserve deposit ratio also changes in the opposite direction with money multiplier
11. The endogeneity of money supply means that money supply is difficult to be directly controlled by the central bank, but is determined by all economic entities in the economic system. The exogenous nature of money supply means that money supply can be directly controlled by the central bank outside the economic system
12. China's current money supply has both the generality of market economy and the characteristics of transition economy, which makes money supply coexist in exogenous and endogenous. Generally speaking, the central bank still has a strong control over the money supply, but at the same time, with the deepening of reform and opening up, the endogeneity of money supply is also increasing.
6. Derivative deposit is not a virtual currency. Virtual currency generally refers to bitcoin, Ruitai coin, Laite coin and other digital cryptocurrency
derivative deposits refer to the deposits created by banks by granting loans. It is the symmetry of the original deposit and the derivation and expansion of the original deposit. It refers to the deposits derived from the business activities of commercial banks, such as loans, discount or investment. The process of derivative deposits is that commercial banks absorb deposits, issue loans, and the end-users deposit them in the bank to form new deposits, which eventually leads to the increase of total deposits in the banking system. Formula: derived deposit = original deposit × one ÷ Legal reserve rate - 1).
derivative deposits refer to the deposits created by banks by granting loans. It is the symmetry of the original deposit and the derivation and expansion of the original deposit. It refers to the deposits derived from the business activities of commercial banks, such as loans, discount or investment. The process of derivative deposits is that commercial banks absorb deposits, issue loans, and the end-users deposit them in the bank to form new deposits, which eventually leads to the increase of total deposits in the banking system. Formula: derived deposit = original deposit × one ÷ Legal reserve rate - 1).
7. It occurs when the legal deposit reserve ratio is less than 1. After receiving people's deposits, the bank turns in the legal deposit reserve according to the legal deposit rate, and the rest can be issued in the form of loans. If investors deposit the loans in another bank, the other bank will also hand over part of the legal reserve and lend the rest. In this way, the bank will pay off part of the legal reserve, The amount of money in circulation is several times of the actual amount of money
8. Commercial banks are mainly engaged in instrial and commercial deposits and loans, and provide customers with a variety of services. The funds of commercial banks come from current deposits, savings deposits, fixed deposits, and stocks and bonds issued by themselves. The funds of commercial banks are used in short-term loans, medium-term loans and long-term loans, and they can also handle trust loans, leasing business, securities investment, etc
the cash issued by the central bank only accounts for a part of M1. How does money other than cash come into being? From the overall point of view of the banking system, it can create deposits derivative deposits, deposits are money, so commercial banks can also create money<
to understand how the commercial banking system creates deposits, we use a virtual example to illustrate:
assume that the reserve ratio of commercial banks is 10%
first of all, suppose that depositor a deposits 1000 yuan in cash in a commercial bank (bank 1 for short), the bank deposits 100 yuan in bank 1 as reserve, and the remaining 900 yuan is used for loans or bonds. For example, it lends the 900 yuan to B. B uses the 900 yuan to buy clothes. As a result, the 900 yuan goes to C, the clothes seller. Let's assume that C deposits all the money in bank 2; In this way, bank 2 increases the deposit by 900 yuan. Then, it leaves 10% of the reserve fund, that is, 90 yuan, and lends the remaining 810 yuan to farmer D, who uses it to buy fertilizer. As a result, 810 yuan flows into the hands of fertilizer seller e, who deposits it in bank 3. In this way, bank 3 increases 810 yuan's deposit. Bank 3 left 81 yuan, the rest also lent out, this process can continue
the result of money creation by the banking system will be 10 times of the original 1000 yuan of new cash, reaching 10000 yuan. We call 10 times the money supply multiplier. It is the reciprocal of the statutory reserve<
the result of the banking system creating money
commercial banks can create money derivative deposits, but their ability is subject to the central bank. The reason is that a large part of the reserve ratio belongs to the statutory reserve ratio. If the central bank changes the statutory reserve ratio, it can exert an important influence on the ability of commercial banks to create derivative deposits
of course, commercial banks can change the excess reserve ratio through their own business activities, thus affecting the money supply< Key analysis:
1. The relationship between base money and original deposits
base money refers to the sum of the deposit reserve of commercial banks in the central bank and the currency circulating outside the banking system. The original deposit refers to the deposit that the commercial bank can absorb to increase its reserve, including the cash that the commercial bank absorbs and the deposit in the central bank. It is a part of the base currency. So the base money is larger than the original deposit
2. The relationship between the original deposit and the derivative deposit
dividing the deposit into the original deposit and the derivative deposit theoretically shows that the status and function of the two deposits are different in the bank operation. In fact, it is impossible to distinguish between the original deposit and the derivative deposit in the total deposit of the bank. Derivative deposit is not false deposit, and the process of bank creating derivative deposit is not the process of creating actual value, but the process of creating value symbol< The relationship between the base money provided by the central bank and the deposit money created by commercial banks is actually a relationship of source and flow. Because the central bank controls the source of commercial banks to create deposit money - the creation and supply of base money; As a direct money supplier, commercial banks create the deposit and loan activities of deposit money, so the amount of money they can provide is based on the base money.
the cash issued by the central bank only accounts for a part of M1. How does money other than cash come into being? From the overall point of view of the banking system, it can create deposits derivative deposits, deposits are money, so commercial banks can also create money<
to understand how the commercial banking system creates deposits, we use a virtual example to illustrate:
assume that the reserve ratio of commercial banks is 10%
first of all, suppose that depositor a deposits 1000 yuan in cash in a commercial bank (bank 1 for short), the bank deposits 100 yuan in bank 1 as reserve, and the remaining 900 yuan is used for loans or bonds. For example, it lends the 900 yuan to B. B uses the 900 yuan to buy clothes. As a result, the 900 yuan goes to C, the clothes seller. Let's assume that C deposits all the money in bank 2; In this way, bank 2 increases the deposit by 900 yuan. Then, it leaves 10% of the reserve fund, that is, 90 yuan, and lends the remaining 810 yuan to farmer D, who uses it to buy fertilizer. As a result, 810 yuan flows into the hands of fertilizer seller e, who deposits it in bank 3. In this way, bank 3 increases 810 yuan's deposit. Bank 3 left 81 yuan, the rest also lent out, this process can continue
the result of money creation by the banking system will be 10 times of the original 1000 yuan of new cash, reaching 10000 yuan. We call 10 times the money supply multiplier. It is the reciprocal of the statutory reserve<
the result of the banking system creating money
commercial banks can create money derivative deposits, but their ability is subject to the central bank. The reason is that a large part of the reserve ratio belongs to the statutory reserve ratio. If the central bank changes the statutory reserve ratio, it can exert an important influence on the ability of commercial banks to create derivative deposits
of course, commercial banks can change the excess reserve ratio through their own business activities, thus affecting the money supply< Key analysis:
1. The relationship between base money and original deposits
base money refers to the sum of the deposit reserve of commercial banks in the central bank and the currency circulating outside the banking system. The original deposit refers to the deposit that the commercial bank can absorb to increase its reserve, including the cash that the commercial bank absorbs and the deposit in the central bank. It is a part of the base currency. So the base money is larger than the original deposit
2. The relationship between the original deposit and the derivative deposit
dividing the deposit into the original deposit and the derivative deposit theoretically shows that the status and function of the two deposits are different in the bank operation. In fact, it is impossible to distinguish between the original deposit and the derivative deposit in the total deposit of the bank. Derivative deposit is not false deposit, and the process of bank creating derivative deposit is not the process of creating actual value, but the process of creating value symbol< The relationship between the base money provided by the central bank and the deposit money created by commercial banks is actually a relationship of source and flow. Because the central bank controls the source of commercial banks to create deposit money - the creation and supply of base money; As a direct money supplier, commercial banks create the deposit and loan activities of deposit money, so the amount of money they can provide is based on the base money.
9. Deposit money creation means that commercial banks first make use of their own favorable conditions of absorbing deposits and obtaining various sources of funds, and then derive more deposits by issuing loans, engaging in investment, handling settlement and other business activities, so as to expand the scale of credit and increase the money supply.
10. There are three limiting factors in the amount of deposit money creation:
1. The cash leakage rate (c) is the limit on deposit creation.
cash leakage means that customers always withdraw more or less cash from commercial banks, resulting in some deposits flowing out of the banking system. Cash leakage rate refers to the ratio between cash leakage and total deposits, also known as withdrawal rate. When the bank has cash leakage, the deposit reserve of the banking system will be reced, which limits the ability of the banking system to create derivative deposits< 2. Excess reserve ratio (E) limits deposit creation
excess reserve means that a prudent banker will not lend the full amount of the bank's deposit reserve. In order to be safe and cope with accidents, commercial banks will always maintain a part of the fund reserve that exceeds the legal reserve. The excess reserve ratio refers to the ratio of reserves and total deposits retained by banks in excess of statutory requirements. This will also weaken the ability of the banking system to create derivative deposits, so that the deposit multiplier formula of the banking system's credit creation will be revised to
3. Time deposit reserve ratio (T) limits deposit creation
bank deposits can at least be divided into current deposits and fixed deposits, for which the central bank usually sets different reserve ratios< Deposit money is a special type of credit currency. Credit money refers to the currency guaranteed by the credit of the currency issuer, while deposit money is the credit currency guaranteed by the credit status of the savings institution issuing the deposit
2. The role of deposit currency
deposit currency refers to the bank deposit that can play the role of currency, mainly refers to the current deposit that can handle the transfer settlement by issuing cheques. Generally speaking, current deposit balance of commercial banks should be regarded as currency, which is usually regarded as "deposit currency". Deposit currency is mainly reflected in the current deposit of units and indivials in the bank account, which is mainly transferred in the banking system and can be used for transfer settlement. The deposit currency comes from the deposit of cash currency and the derivative mechanism of bank loan.
1. The cash leakage rate (c) is the limit on deposit creation.
cash leakage means that customers always withdraw more or less cash from commercial banks, resulting in some deposits flowing out of the banking system. Cash leakage rate refers to the ratio between cash leakage and total deposits, also known as withdrawal rate. When the bank has cash leakage, the deposit reserve of the banking system will be reced, which limits the ability of the banking system to create derivative deposits< 2. Excess reserve ratio (E) limits deposit creation
excess reserve means that a prudent banker will not lend the full amount of the bank's deposit reserve. In order to be safe and cope with accidents, commercial banks will always maintain a part of the fund reserve that exceeds the legal reserve. The excess reserve ratio refers to the ratio of reserves and total deposits retained by banks in excess of statutory requirements. This will also weaken the ability of the banking system to create derivative deposits, so that the deposit multiplier formula of the banking system's credit creation will be revised to
3. Time deposit reserve ratio (T) limits deposit creation
bank deposits can at least be divided into current deposits and fixed deposits, for which the central bank usually sets different reserve ratios< Deposit money is a special type of credit currency. Credit money refers to the currency guaranteed by the credit of the currency issuer, while deposit money is the credit currency guaranteed by the credit status of the savings institution issuing the deposit
2. The role of deposit currency
deposit currency refers to the bank deposit that can play the role of currency, mainly refers to the current deposit that can handle the transfer settlement by issuing cheques. Generally speaking, current deposit balance of commercial banks should be regarded as currency, which is usually regarded as "deposit currency". Deposit currency is mainly reflected in the current deposit of units and indivials in the bank account, which is mainly transferred in the banking system and can be used for transfer settlement. The deposit currency comes from the deposit of cash currency and the derivative mechanism of bank loan.
Hot content