British economist Ryan Collins (J. Ryan-Collins）、Werner(R. Wemer）、Jackson (A. Jackson) and Greenham (T. Greenham) in his 2012 book Where Money Comes from: A Guide to Britain’s Monetary and Banking System，Focus on the analysis of the British currency and banking system，And put forward some novel ideas。The title page of the Chinese translation of the book published in 2022 reads: Based on detailed analysis，This book proposes a perspective that subverts traditional cognition，That is, most of the money supply in the modern economy is created and distributed by bet365 tennis bet through credit extension。

The basic type of money is currency、Reserves deposited by commercial banks at the central bank、Commercial bank demand deposit。The first two currencies are called base currencies，The latter currency is called demand deposit，It is well known that money is mostly in demand deposits。The viewpoint of “subverting traditional cognition” proposed by Ryan Collins and others in this book is reflected in the following aspects。First，People’s common understanding of banks is to first accept deposits and then issue loans，But this perception is wrong。They point out: “The reality is，When disbursing the loan，The bank doesn’t need anyone else’s money。Banks do not wait for deposits to issue loans。Bank deposits are purely created by the banking system itself。”Second，People’s traditional understanding of central banks is that they can control the money supply，Unfortunately this textbook model of central banking is outdated，Not accurate either。They wrote: “When banks are confident，They will create new money by issuing loans and increasing borrower deposits...the size of commercial bank credit and the money supply of the entire country，Mainly depends on the confidence and motivation of the bank。”Third，People’s traditional understanding of the central bank is that it can determine commercial bank credit，But this perception is wrong。They point out: “It is not bet365 tennis bet England that decides how much credit banks can issue，It is the banks that decide how much central bank reserves and cash bet365 tennis bet England must lend them。”But the author thinks，The viewpoint of “subverting traditional cognition” proposed in the book “Where Does Money Come from”，Failed to subvert “traditional” cognition。

There is no unconditional loan disbursement without bet365 tennis bet

The situation described in the first point of view of Ryan Collins and others does exist，But it will only happen under certain conditions，It is impossible for commercial banks to issue loans without deposits unconditionally。From a formal point of view，Commercial banks can issue loans by recording the borrower's deposits on the account，Loans can create deposits，But this is not unconditional。Suppose a commercial bet365 tennis bet does not accept deposits，No reserves at the central bet365 tennis bet，No deposits in other commercial banks，Does not hold other financial assets，The commercial bet365 tennis bet now issues a loan by writing a deposit in the borrower's account，Loans seem to create deposits。But，When the borrower spends money from his deposit，Or when withdrawing the deposit，How does this commercial bet365 tennis bet make payment？

If the commercial bet365 tennis bet conducts multilateral settlement through the central bet365 tennis bet，It must have reserves at the central bet365 tennis bet；If the commercial bet365 tennis bet conducts bilateral settlement with other commercial banks，It must have deposits in other commercial banks；If the commercial bet365 tennis bet makes payment by selling other financial assets，It must first hold other financial assets。This means that the commercial bet365 tennis bet must meet the above conditions，Only by using loans to create deposits。Commercial banks accept deposits，It is the reserves formed in the central bet365 tennis bet、Deposits in other commercial banks、Source of holding other financial assets。

Considering that bet365 tennis bet England has abandoned the statutory reserve requirement，If bet365 tennis bet England used the discount window and open market operations to increase the monetary base，That is, commercial banks exchange their own financial assets for reserves and have excessive reserves，Of course, it can also be the case that commercial banks use deposits to supplement reserves and there are excessive reserves，Commercial banks can rely on excess reserves to create deposits with loans，This is how the multiplier effect of money happens。Even so，The source of excess reserves is also the deposits received by commercial banks。It can be seen from this，Ryan Collins and others have absoluteized and generalized the process of creating deposits from loans that occur when excessive reserves occur or occur under certain specific conditions。

　The central bet365 tennis bet determines the direction of change in the money supply

The scale of deposits created by commercial bank loans is restricted by the monetary authorities。Although bet365 tennis bet England abolished the mandatory statutory reserve system in 1981，Many central banks in Western countries have also weakened their management of reserves，However, the central bank still takes various measures to supervise the loan scale of commercial banks，Commercial banks must also retain sufficient reserves in order to avoid operating risks。Take the UK as an example，As stated in the book "Where Money Comes from" by Ryan Collins and others，bet365 tennis bet England has always had a liquidity facility，And implement a new liquidity mechanism after 2009: each commercial bank must hold a certain amount of reserves or British government bonds as a liquidity guarantee。Also，bet365 tennis bet England supervises British commercial banks in accordance with the Basel Agreement Ⅲ，Core capital adequacy ratio is the ratio of core capital to risk-weighted assets of 8.5%—11%。Obviously，Commercial banks are not confident enough to create money supply at will。The central bank cannot decide what the final money supply will be，But it can determine the direction of change in the money supply。

Ryan Collins and others refer to cash and reserves as central bet365 tennis bet currency，They noted: “Out of the total loan amount of £10,000，The bet365 tennis bet will only need an additional £937 of central bet365 tennis bet currency – less than 7% of total lending。”But know it，Assuming other conditions remain unchanged，No central bet365 tennis bet money increase of £937，There would be no loan of £10,000。Actually，The money supply change process is the central bet365 tennis bet、Commercial bet365 tennis bet、Depositor、The process of interaction between borrowers，Exaggerating or denying the role of the central bet365 tennis bet is one-sided。

In reality，bet365 tennis bet England still affects the UK’s money supply by adjusting the monetary base。bet365 tennis bet England’s monetary policy objective is to maintain price level stability，Usually adjusting the bank rate and base money to achieve monetary policy goals。The so-called bank rate here，Refers to the interest rate paid by bet365 tennis bet England on the reserves of commercial banks。When the UK economy is in recession，bet365 tennis bet England lowers the banking rate and increases the monetary base through bond purchases；When there is inflation in the UK，bet365 tennis bet England increases the banking rate and reduces the monetary base by selling bonds。According to Bank of England statistics，The monetary expansion cycle from November 2020 to September 2022，UK base money (M0) increased by 44.£5.4 billion，Currency and demand deposits (M1) increased by 4284.£1.9 billion；Monetary contraction cycle from September 2022 to February 2023，M0 decreased by 10.£8.7 billion，M1 decreased by 1674.£7.9 billion。Changes in demand deposits may not be entirely caused by changes in base currency，But the impact of base currency on demand deposits is obvious。

　bet365 tennis bet is not unilateral and unconditional

The role of the monetary authority as “lender of last resort” is not unilateral and unconditional。As mentioned by Ryan Collins et al. “Banks decide how much central bank reserves and cash bet365 tennis bet England must lend them”，is the liquidity support provided by bet365 tennis bet England to commercial banks through the "Discount Window Facility"，It has become a unilateral and unconditional demand of commercial banks。

Actually，When bet365 tennis bet England provides liquidity support to commercial banks through the "Discount Window Facility"，Quality of discounted bills、Qualifications of commercial banks coming for discounts、There are clear regulations on the use of discount funds。bet365 tennis bet England can also adjust the discount amount by adjusting the discount rate。Fisher (P, Executive Director of Markets Department, Bank of England. Fisher) gave a speech entitled "Bank of England provides liquidity support: discount window facility" in 2012，Explanation of the "lender of last resort" function of bet365 tennis bet England。He pointed out，bet365 tennis bet England will only lend to commercial banks it believes are solvent and have viable plans。The term of "Discount Window Facility" loan is usually 30 days，Only intends to provide short-term liquidity support to banks。The pricing principle of "discount window convenience" is to encourage banks to prevent themselves from operating risks and reduce moral hazard。

It can be seen from this，The “discount window facility” works both ways: when the monetary authorities want to release liquidity，Commercial banks may not come to discount；When a commercial bet365 tennis bet requires discount，The monetary authority may not grant loans。Also，The "discount window facility" is conditional: only qualified commercial banks can obtain liquidity support by submitting qualified discount bills。

(The author is a professor bet365 tennis bet School of Economics and Business Administration, Beijing Normal University)