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To: Moominoid who wrote (11793)	12/12/2001 10:53:02 AM
From: Ilaine	Respond to of 74559

I agree. eom

To: Moominoid who wrote (11793)	12/12/2001 10:59:23 AM
From: LLCF	Read Replies (4) \| Respond to of 74559

<I'm puzzled by this 100% reserve requirement thing. I think it must be a problem with terminology, because a bank that can't lend isn't a bank, it's just a safe. > She assumed a bank turns into a safe... that's right, no financial intermediary capabilities at all. What I think she means to debate now is that demand deposits would have to always be kept in the bank in case someone walked in... in reality the overnite market is very liquid as we know and banks huge and can easily lend even some demand deposits out longer term as they observe their flows, as well as the fact that I don't think anyone is really advocating not having some flexibility on float or even partial credit creation in the very short term. FWIW, Money and Banking is the exact course where you get to run your own bank and manage this EXACT issue... she shouldn't have dropped it. DAK