Скачать презентацию chapter 16 Multiple Deposit Creation and the Money Скачать презентацию chapter 16 Multiple Deposit Creation and the Money

841e4a62d0260db23d61bc799b59a1bf.ppt

  • Количество слайдов: 21

chapter 16 Multiple Deposit Creation and the Money Supply Process chapter 16 Multiple Deposit Creation and the Money Supply Process

Four Players in the Money Supply Process 1. Central bank: the Fed / People’s Four Players in the Money Supply Process 1. Central bank: the Fed / People’s Bank of China 2. Banks the financial intermediaries that accept deposits and make loans. 3. Depositors who have a surplus of funds 4. Borrowers from banks who need funds Copyright © 2003 Addison Wesley TM 15 - 2

Central bank • It is a government agency that oversees the banking system and Central bank • It is a government agency that oversees the banking system and is responsible for the conduct of monetary policy. Emerging of Central bank 1. Unity of money 2. Clears checks 3. Lender of last resort 4. Regulates banks Copyright © 2003 Addison Wesley TM 15 - 3

Function of central bank • Issuing bank • Bank’s bank • Government’ s bank Function of central bank • Issuing bank • Bank’s bank • Government’ s bank Copyright © 2003 Addison Wesley TM 15 - 4

Tyes of central bank • • • Single type central bank system （单一式） Unitary（一元式）binary（二元式） Tyes of central bank • • • Single type central bank system （单一式） Unitary（一元式）binary（二元式） Compound central bank system（复合式） Quasi central bank system （准央行制度） Multinational central bank system（跨国） Copyright © 2003 Addison Wesley TM 15 - 5

Fed Balance Sheet Copyright © 2003 Addison Wesley TM 15 - 6 Fed Balance Sheet Copyright © 2003 Addison Wesley TM 15 - 6

Federal reserve system Assets Liabilities Government securities Currency in circulation Discount loans Reserves Copyright Federal reserve system Assets Liabilities Government securities Currency in circulation Discount loans Reserves Copyright © 2003 Addison Wesley TM 15 - 7

Liabilities • 1. Currency in circulation • Which is the amount of currency in Liabilities • 1. Currency in circulation • Which is the amount of currency in the hands of the public. • 2. Reserves • All banks have an account at the Fed in which they hold deposits. • Reserves=deposit in Fed +vault cash=required reserves+ excess reserves Copyright © 2003 Addison Wesley TM 15 - 8

Assets • • 1. government securities Open market operations 2. discount loans Discount rate Assets • • 1. government securities Open market operations 2. discount loans Discount rate Copyright © 2003 Addison Wesley TM 15 - 9

The Monetary Base 1. high-powered money 高能货币 MB= C + R C –currency in The Monetary Base 1. high-powered money 高能货币 MB= C + R C –currency in circulation R –reserves Q: 央行主要通过什么方式来控制MB？ Copyright © 2003 Addison Wesley TM 15 - 10

Control of the Monetary Base MB = C + R Open Market Purchase from Control of the Monetary Base MB = C + R Open Market Purchase from Bank The Banking System Assets Liabilities The Fed Assets Liabilities Securities – $100 Reserves + $100 Open Market Purchase from Public Assets Liabilities Securities + $100 Reserves + $100 The Fed Assets Liabilities Securities – $100 Deposits + $100 Banking System Assets Securities + $100 Reserves + $100 Liabilities Reserves + $100 Checkable Deposits + $100 Result: R $100, MB $100 Copyright © 2003 Addison Wesley TM 15 - 11

If Person Cashes Check Public Assets Liabilities The Fed Assets Securities – $100 Currency If Person Cashes Check Public Assets Liabilities The Fed Assets Securities – $100 Currency + $100 Result: R unchanged, MB $100 Liabilities Securities + $100 Please write the T account, if central bank sell seurities. To public To commercial banks Effect on MB certain, on R uncertain Copyright © 2003 Addison Wesley TM 15 - 12

Shifts From Deposits into Currency Public Assets The Fed Liabilities Assets Deposits – $100 Shifts From Deposits into Currency Public Assets The Fed Liabilities Assets Deposits – $100 Currency + $100 Liabilities Currency + $100 Reserves – $100 Banking System Assets Liabilities Reserves – $100 Deposits – $100 Result: R $100, MB unchanged Copyright © 2003 Addison Wesley TM 15 - 13

Case analysis • It is common to read in the newspaper about a Federal Case analysis • It is common to read in the newspaper about a Federal reserve intervention to buy or sell dollars in the foreign exchange market. • Can this intervention also be a factor that affects the monetary base? Copyright © 2003 Addison Wesley TM 15 - 14

Discount Loans Banking System Assets Liabilities Reserves Discount + $100 loan + $100 The Discount Loans Banking System Assets Liabilities Reserves Discount + $100 loan + $100 The Fed Assets Discount loan + $100 Liabilities Reserves + $100 Result: R $100, MB $100 Conclusion: Fed has better ability to control MB than R Copyright © 2003 Addison Wesley TM 15 - 15

Deposit Creation: Single Bank When the central bank supplies the banking system with $1 Deposit Creation: Single Bank When the central bank supplies the banking system with $1 of additional reserves, deposits increase by a multiple of this amount. Assets Securities Reserves Loans Assets Securities Loans Copyright © 2003 Addison Wesley First National Bank Liabilities – $100 + $100 Deposits + $100 First National Bank Liabilities – $100 + $100 TM 15 - 16

Deposit Creation: Banking System Assets Reserves Loans Copyright © 2003 Addison Wesley + $100 Deposit Creation: Banking System Assets Reserves Loans Copyright © 2003 Addison Wesley + $100 + $10 + $90 +$9 + $81 Bank A Liabilities Deposits + $100 Bank B Liabilities Deposits + $90 TM 15 - 17

Deposit Creation Copyright © 2003 Addison Wesley TM 15 - 18 Deposit Creation Copyright © 2003 Addison Wesley TM 15 - 18

Deposit Multiplier If Bank A buys securities with $90 check Bank A Assets Liabilities Deposit Multiplier If Bank A buys securities with $90 check Bank A Assets Liabilities Reserves + $10 Deposits + $100 Securities + $90 Seller deposits $90 at Bank B and process is same Whether bank makes loans or buys securities, get same deposit expansion Copyright © 2003 Addison Wesley TM 15 - 19

Deposit Multiplier Simple Deposit Multiplier 1 D = R r. D Deriving the formula Deposit Multiplier Simple Deposit Multiplier 1 D = R r. D Deriving the formula R = RR = r. D D D= 1 r. D R D = 1 r. D R Copyright © 2003 Addison Wesley TM 15 - 20

Banking System As a Whole Banking System Assets Liabilities Securities – $100 Deposits Reserves Banking System As a Whole Banking System Assets Liabilities Securities – $100 Deposits Reserves + $100 Loans + $1000 Critique of Simple Model Deposit creation stops if: 1. Proceeds from loan kept in cash 2. Bank holds excess reserves Copyright © 2003 Addison Wesley TM 15 - 21