ملف:Michael Kumhof (cropped).jpg

English: The focus of the presentation was on Michael Kumhof and Zoltan Jakab’s working paper ‘Banks Are Not Intermediaries of Loanable Funds – And Why This Matters’, in which they contrast the intermediation of loanable funds model of banking with the financing through money creation model. Following identical shocks, money creation models predict changes in bank lending that are far larger, happen much faster and have much larger effects on the real economy than intermediation models. Mr. Kumhof outlined his argument that banks provide financing through the creation of new monetary purchasing power for their borrowers and are not intermediaries of real loanable funds.