The institutional combination of illiquid assets and demand deposit banking is regarded as vulnerable to collapse because of the impatience of depositors. We suggest that the mechanism of fully backed central bank money is a means of redress.

We decompose the representative agent into her manager, worker and rentier selves. The criterion is the information set of each of the 'incarnations' at every stage of a repeated game. The rentier's information set includes anticipating information while the information set of the other agents...