The economic rationale for the proposed banking reform in Iceland

Abstract Following the traumatic experience of Iceland in the aftermath of the global financial crisis, the government is considering seriously a proposal to move to a sovereign money system under which commercial banks do not have the ability to create money by expanding credit. The rationale for s...

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Bibliographic Details
Main Author: Imad A. Moosa
Format: Article in Journal/Newspaper
Language:unknown
Subjects:
Iceland
Online Access:http://link.springer.com/10.1057/s41261-018-0062-7
id ftrepec:oai:RePEc:pal:jbkreg:v:19:y:2018:i:4:d:10.1057_s41261-018-0062-7
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spelling ftrepec:oai:RePEc:pal:jbkreg:v:19:y:2018:i:4:d:10.1057_s41261-018-0062-7 2024-04-14T08:13:25+00:00 The economic rationale for the proposed banking reform in Iceland Imad A. Moosa http://link.springer.com/10.1057/s41261-018-0062-7 unknown http://link.springer.com/10.1057/s41261-018-0062-7 article ftrepec 2024-03-19T10:27:56Z Abstract Following the traumatic experience of Iceland in the aftermath of the global financial crisis, the government is considering seriously a proposal to move to a sovereign money system under which commercial banks do not have the ability to create money by expanding credit. The rationale for such a drastic move can be found in the propositions that fractional reserve banking allows bankers to determine the money supply, that the procyclical behaviour of banks has detrimental consequences for the economy at large, and that the central bank has no power to control the money supply. Iceland, Fractional reserve banking, Soverign money, Financial intermediation theory, Banking regulation Article in Journal/Newspaper Iceland RePEc (Research Papers in Economics)
institution Open Polar
collection RePEc (Research Papers in Economics)
op_collection_id ftrepec
language unknown
description Abstract Following the traumatic experience of Iceland in the aftermath of the global financial crisis, the government is considering seriously a proposal to move to a sovereign money system under which commercial banks do not have the ability to create money by expanding credit. The rationale for such a drastic move can be found in the propositions that fractional reserve banking allows bankers to determine the money supply, that the procyclical behaviour of banks has detrimental consequences for the economy at large, and that the central bank has no power to control the money supply. Iceland, Fractional reserve banking, Soverign money, Financial intermediation theory, Banking regulation
format Article in Journal/Newspaper
author Imad A. Moosa
spellingShingle Imad A. Moosa
The economic rationale for the proposed banking reform in Iceland
author_facet Imad A. Moosa
author_sort Imad A. Moosa
title The economic rationale for the proposed banking reform in Iceland
title_short The economic rationale for the proposed banking reform in Iceland
title_full The economic rationale for the proposed banking reform in Iceland
title_fullStr The economic rationale for the proposed banking reform in Iceland
title_full_unstemmed The economic rationale for the proposed banking reform in Iceland
title_sort economic rationale for the proposed banking reform in iceland
url http://link.springer.com/10.1057/s41261-018-0062-7
genre Iceland
genre_facet Iceland
op_relation http://link.springer.com/10.1057/s41261-018-0062-7
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