Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 6, 2018 erstellt
Description:
The fractional reserve theory of money creation only considers the reserve requirement but ignores prudential regulations. We study the impacts of three prudential regulations under the Basel III framework on the commercial bank's ability to create money. Using a balance sheet approach, we formulate the corresponding maximum money multiplier under each regulation. We find that in addition to the concerned minimum required ratio, the banking system's liquidity and equity positions also play important roles in determining the maximum money supply