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Where Does Money Come From?: A Guide To The Uk Monetary And Banking System
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Where Does Money Come From?: A Guide To The Uk Monetary And Banking System

4.42  ·  Rating details ·  216 ratings  ·  21 reviews
This book aims to firmly establish a common understanding that commercial banks create new money. There is no deeper mystery, and we must not allow our mind to be repelled. Only then can we properly address the much more significant question: Of all the possible alternative ways in which we could create new money and allocate purchasing power, is this really the best?
Paperback, 144 pages
Published September 28th 2011
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James Elder
Nov 03, 2015 rated it it was amazing
Highly educational, and has gone straight to a high position in my list of 'books I wish everyone would read'.

In summary, most of us have two simple ideas of how banking works in the UK:

1) The Bank of England creates the money, and it gets distributed out from there.
2) Banks take in savings on the one hand, and lend out on the other.

Turns out both of these are wrong. 97% of money in the UK is created by commercial banks through the simple act of lending. It happens electronically: a few button p
Apr 12, 2014 rated it it was amazing
I have looked all over Amazon for a book that explains how money and banks work and this is by far the best book out there. It is specifically about the UK, but most developed nations work very similarly. This is based on independent research and interviews with actual central bankers, not economic theory. There are numerous places where it has different explanations of how various parts of the monetary system work due to this research.

This book is rather short, but it that is mainly because it
Ash Moran
Dec 18, 2011 rated it really liked it
This is an extremely concise and informative guide to the way the banking system works in the UK. If you're like most people, you'll have one of two beliefs about how the banking system works:

* Banks collect deposits and use those deposits to create loans for borrowers
* Banks create loans by accepting a promise to pay as an asset, and create a corresponding accounting entry to write an equal value of new money into existence, but must retain a minimum proportion of deposits backing these new-mon
Zaeem Arshad
Mar 01, 2018 rated it really liked it  ·  review of another edition
This is a fantastic book for anyone looking to understand how money is created in the modern day. It lays bare the assumptions the general populace and some economists have about the process and uses facts and figures to explain the money creation and circulation process from a British perspective.

The important take away is that while the Government gives credibility to some forms of money by accepting them as tax payments, it's the commercial banks that are involved in the creation of credit wh
Jesper Döpping
Jun 16, 2019 rated it really liked it  ·  review of another edition
Clear simple and well written

This books gives a very clear down to basic description of how the British system works. Should be mandatory reading in any democratic society
Dec 31, 2018 rated it really liked it
Surprisingly fun book to read, tho perhaps a bit dry if you're not very curious about how government and private banking systems interact to create money and grow the economy.
Jun 20, 2012 rated it really liked it
Shelves: economics
In detail view of UK banking system. Difficult and technical topic explained in readable way. Doesn't take any stance whether the system is good or bad. Waiting for similar book on Euro-zone...
Yolanda Blanch Ruiz
Apr 22, 2013 rated it it was amazing
A must read for everyone. Clear and to the point!
Jan 27, 2019 rated it it was amazing  ·  review of another edition
This is an excellent and very clear, although not untechnical, review of how the UK banking system works. The book explains that money is credit (and not a gold-like commodity) for the most part and how banks create money from thin air and why the whole banking system is for fragile. After reading this book one understands where the banking crises like 2008 come from and why we are likely to have another one.
Joosep Simm
Mar 15, 2020 rated it it was amazing
Shelves: business
Indepth look into what is money and how it's created. Includes historical models too. I really liked it also pinpointed which monetary policies has worked in the past and which did not.
I knew before that banks create money, but didn't know how it is and has been regulated. What options governments have, what ECB is up to etc.

Was worth the read.
Josh Smith
Jan 20, 2020 rated it it was amazing
Excellent explanation as to how money is truly created in the modern era. Challenges the classical thought process and describes its faults. Highly recommend for anyone looking to understand the modern-day banking system.
Toby Waller
Mar 29, 2019 rated it it was amazing  ·  review of another edition

Better then economic textbooks
Explains how economics and finance and banking really work and provides alternatives. Paul Krugman should read this book.
Pablo Estevez
Jun 10, 2020 rated it it was amazing
Excellent explainer. Strikes the difficult balance between being concise and detailed on a complex subject.
Kymair Wu
Oct 19, 2018 rated it it was amazing  ·  review of another edition
This feels so awesome: Finally understand how money is created within our modern society.
Tim Huang
Jul 01, 2018 rated it really liked it
An updated and insightful look of the modern monetary system. The book is more Kenyas style economical thinking.
Nick Aurelius
Sep 18, 2019 rated it it was amazing
After reading a load of different articles and books this small book made sense and was easy to digest. I cant recommend it enough.
Matt Doran
Feb 27, 2018 rated it really liked it  ·  review of another edition
Truly fascinating. Explains how money in our economies are created. Spoiler, 97% is by created by the commercial banks who are incentivised to created that inflated asset prices and doesn’t add to the productivity of the economy.
Jan 29, 2013 rated it really liked it
Thorough exposition into the inner workings of our furtive monetary system. A little dense in parts for the general reader and it feels hasty in its composition. I believe the upcoming edition will be edited to make it an easier to navigate through a highly complex subject.

Nevertheless, the book provides a clear explanation of the UK monetary system works (the first of its kind) and how private banks create our money supply out of debt. Essential to an informed understanding of how the monetary
Chris Conway
Nov 20, 2018 rated it it was amazing
I've read a few books on this topic and this is by far the clearest, mainly due to it's short textbook structure but also by actually describing the processes to create money, the mechanisms and institutions involved and what that looks like on the balance sheets of banks and governments. Also, by not presenting outdated arguments and assumptions such as those by Smith and Ricardo it sticks to a clear single definition.
Steve Mateer
Jul 04, 2013 rated it really liked it
clear explanations on both the origin of money, credit creation and the banking sector (focusing mainly on retail and central banks). Extremely interesting and insightful. best book ive read on uk banking to date
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