Relying on theories in which bank loans create deposits—a process we call “funding liquidity creation”—we measure how … constrained by the supply of cash deposits. During the 2001-2020 period, 92% of bank deposits were due to funding liquidity … much funding liquidity the U.S. banking system creates. Private money creation by banks enables lending to not be …

, thereby enhancing liquidity creation and the value of intermediation. Higher bank capital leads to more trading states and … diminish the value of the bank's core intermediation service? Using a banking model in which borrowers face production output … uncertainty and banks facilitate real investment by creating funding liquidity - they lend more than the entire initial endowment …