Chapter Two
1. Demand deposits’ are, as the nomenclature implies, deposits repayable to the depositor on demand. In India, this category includes ‘savings bank’ and ‘current’ deposit accounts.
2. The money multiplier is not to be confused with the income multiplier, which is also important to fiscal policy.
3. Critics of fractional reserve banking allege that maintaining reserves may not altogether eliminate banking panics. If banking assets are insufficient to compensate all depositors, the liquidity risk would still remain.
4. However, critics of the bank rate argue that the bank rate could influence the ‘cost of credit’, but has no bearing on the ‘availability of credit’.
5. The sub-prime crisis is described more completely in the chapter ...
Get Management of Banking and Financial Services, 2nd Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
