Recent evidences provoke broad rethinking of the role of banks in money creation. The authors argue that apart from the reserve requirement, prudential regulations also play important roles in constraining the money supply. Specifically, they study three Basel III regulations and theoretically...

Both money and debt are products of credit creation of banks. Money is always circulating among traders by facilitating commodity transactions. In contrast, debt is created by borrowing and annihilated by repayment as it is matured. However, when this creation- annihilation process is mediated...