Journal Article

Should we reduce the role of banks in the monetary policy process?


Abstract: The traditional view of banks in the monetary and price level control process is based on banks being producers of money in the form of deposits. Some economists have recently argued, however, that growth of bank deposits has no affect on price level stability. They say that the role of banks in the monetary policy process could be reduced with no adverse effect on price level stability, principally by removing reserve requirements.

Keywords: Bank reserves; Monetary policy; Bank deposits;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Review

Publication Date: 1988

Volume: 73

Issue: Feb

Pages: 18-28