Where Does Money Come From?

by Josh Ryan-Collins, Tony Greenham, Richard Werner

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?

Genres: Economics, Finance, Nonfiction, Politics, Business, Money, Science

184 pages, Paperback

First published September 28, 2011

Reviews

[Katia N · Rating 4 out of 5]

This book is effective in describing the functioning of the UK monetary system with respective roles of the Bank of England and the commercial banks in money creation. It touches upon the history, mechanics of transactions, forex and QE. They discuss different definitions and theories of money. They come to the conclusion that at least now it is a social construct of debt/credit obligations between a government, central bank and commercial banks rather than a commodity.

It also very briefly talks what works and what does not in the authors' opinion. They seem to be advocating more close directions credit controls over money expansion by commercial banks. They also briefly discuss the role of the government.

It is useful for everyone who wants to understand how the system functions. But it is written pre-Brexit. So some of the regulation valid before might not be valid now. However, as the UK was never part of the Eurozone, it might be not that significant.

Under the spoiler alert is just a bunch of quotes and ideas from the book. And this is more food for my thoughts rather than a review.


QE

All three channels are indirect, and all attempt to stimulate the real economy by acting through the financial sector. Thus bond purchase operations by central banks, including what is styled as QE, do not create new credit or deposits (purchasing power) directly in the hands of households, businesses or the Government. New credit may be created in the non-bank financial (or investment) sector. The investment sector may choose to invest this new purchasing power in newly issued corporate bonds or equity that may allow companies to increase their spending. However, it may also choose to buy government or corporate bonds from outside the UK, or it may invest in existing financial assets such as previously issued bonds or equities, or derivatives based on commodities such as oil or food, which will have the effect of inflating the prices of these assets. Or it may simply sit on these deposits because of concerns about the future of the economy. Meanwhile, companies that are able to raise additional funds through bond or equity issuance may choose to use the money to simply pay off existing bank debt rather than invest in productive activity. If so, this will have the paradoxical effect of reducing credit creation, and the money supply, by exactly the same amount as QE increased it. The banking sector, flooded with new central bank reserves, also has multiple options. It can choose to expand its lending to the real economy. However, it can also simply sit on the reserves. Banks are paid 0.5% interest on reserves by the central bank and they are the most liquid form of asset they can hold (see section 4.1).* Furthermore, if banks do use this additional liquidity to create credit, it might be for transactions that are profitable but do not contribute to GDP, e.g. mortgage lending or foreign currency or commodity speculation. So, bond purchase operations and QE do not involve creating (or ‘printing’) money if by ‘money’, we mean more money in the real economy that is being used in GDP-related transactions. Although it may well have pushed down medium to long term interest rates and made it easier for the Government to borrow by creating significant additional demand for gilts, since at least 2010 the main criticism of QE has been that it has failed to stimulate bank lending in the real economy. Bank credit creation shrank in 2011 and the UK economy moved into a double-dip recession in 2012.†

So, we can perhaps conclude the endogenous versus exogenous money debate as follows: in modern economies, where new money is created by the banking system, the supply of money is driven by credit creation, but credit creation is not driven by the demand for credit. Instead, the credit market is determined by the supply of credit and credit is rationed. It is the quantity of credit supplied, rather than the price of credit, which will determine macro-economic outcomes and without even perhaps being aware of it, banks are thus in a very powerful position. The total increase, or decrease, in the nation’s money supply is the collective result of their individual lending and asset purchase decisions. In other words, because commercial banks ration and allocate credit, and they create new money in the process, they have a decisive influence over the allocation of new money in our economy. Macro-economic policy and analysis should be guided by an understanding and monitoring of these processes,

targeted the growth of bank credit for business investment that facilitates growth in GDP transactions (2012, p. 94). The Bank of England could have provided loan guarantees for lending to non-financial corporations and unincorporated businesses, to indemnify risk averse banks for lending to sectors of the economy that raise GDP (Lyonnet & Werner, 2012, p. 96). The approach to quantitative easing adopted by the Bank of England was not the form of quantitative easing proposed by Richard Werner, because it did not promote increased credit creation by commercial banks as a consequence of the central bank agreeing to purchase all commercial banks impaired and non-performing loans at face value (Lyonnet & Werner, 2012, p. 96)[20]. The Bank of England was unwilling to engage in cleaning commercial banks’ balance sheet of non-performing loans, because of the potential moral hazard this created. Moral hazard suggests that if commercial banks are protected from the consequences of poor lending practices there is a risk that commercial banks will fail to learn from previous mistakes, which will increase future systemic risk in the financial system.
Despite £199 billion of quantitative easin

Lyonnet and Werner (2012, p. 96) suggest the Bank of England could increase economic activity by lending directly to companies and the government. Lyonnet and Werner (2012, p. 96) also suggest that government should no longer issue bonds to fund government deficits. Instead, government should borrow directly from commercial banks, or The Bank of England, through standard loan contracts. Borrowing from commercial banks, or the central bank, creates new money that will not crowd-out existing private sector lending. Whereas, issuing bonds on the Stock Exchange will prevent the money government borrows from being loaned to the private sector, because the bond market primarily comprises of non-bank financial institutions that do not have the ability to create new credit money.



Werner has argued that the theory has important implications for development, growth and unemployment.54, 55, 56, 57, 58, 59 Developing economies should not be dependent on external borrowing, he suggests, since they can achieve non-inflationary growth by creating credit in their own banking system and guiding it towards productive use. The high growth witnessed by many East Asian economies in the post-war era (Japan, Taiwan, Korea, China after 1982) was achieved by the implementation of such a credit guidance regime. Indeed, Werner argues that if properly implemented unemployment could be eradicated using this approach.

Why government investments might be more productive for a certain economy

“Firstly, there are a number of reasons private investors might allocate money in less productive ways than the Government. Private investors, particularly institutional investors, will normally put their money where they receive the highest returns, including investing money in projects outside the UK. While this may result in a higher private return than if they had invested locally, the entire social benefit of the investment will fall abroad. In addition, the private investment sector can and does borrow money for non-productivity-enhancing purposes, such as commodity speculation and commercial property finance. This does not increase GDP transactions and will instead inflate asset prices (see discussion in section 5.6). A further example is when private investors fund private equity vehicles that take over productive manufacturers, fire local staff and outsource production to foreign low-wage countries. This reduces the number of low-skilled jobs available in the UK and contributes to unemployment. Finally, when private sector economic confidence is low, as during recessions, investors will tend to be risk averse and seek existing financial assets, including property, in which to store wealth in preference to providing funding for new commercial ventures. Trading existing assets does not stimulate GDP in the way that investment in new productive capacity and infrastructure does. In contrast, government investment is bound to contribute to GDP transactions – there is little reason for the Government to invest in existing financial assets. Particular types of investment, such as in transport infrastructure, housing construction or low-carbon conversion and energy efficiency-enhancing investments, appear to have a positive long term growth impact but are often under-funded by the private sector because the initial costs of investment are high and the returns on investment are low or take many years to arrive. In addition, spending by the Government tends to also be redistributive; channelling funds towards lower income groups (e.g. via benefits) who may spend a larger proportion of any additional income than higher income socio-economic groups.19»

What is money

Future exchangeability of money is guaranteed by the Government in three key respects: Through its acceptability to pay taxes By tax-payer-backed insurance of bank deposits* By implicit tax-payer-funded guarantees that banks themselves will be bailed out if they get into trouble We can therefore say that all money is credit but not all credit is money. Schumpeter recognised that what is required is a credit theory of money rather than a monetary theory of credit11. And, whilst no definition is perfect, Geoffrey Ingham’s conception of money, which follows Simmel, Keynes and Schumpeter, seems appropriate: money is “a social relation of abstract value defined by a sovereign unit of account”

Alternative to government borrowing to finance budget deficit or expenditure.

1. government could borrow directly from commercial banks.
2. Central bank created credit to be directly spent by the government into the economy or QE.
3. State directly creating money and put it into circulation free of interest. Example 100% reserve requirement for the commercial banks will make them just intermediary. They would stop to create money. I am surprised Friedman advocates it.
4. Regional and local money systems

[James Elder · Rating 5 out of 5]

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 presses creates an asset on the bank's books, a liability on the borrower's books, and a credit balance which can be spent elsewhere in the economy. The vast majority of this money will never be converted into banknotes - it will stay purely as credit balances.

Moreover, the commercial bank doesn't need reserves (e.g. balances in savers' accounts) in order to create this credit.

This has big implications for the way the economy *actually* works, and the tools that the Treasury and the Bank of England have at their disposal to influence it. It turns out that from the early seventies onwards, we've done away with the tools (e.g. credit controls) that actually did something, and we're left with others (e.g. varying interest rates) which have little or no effect.

Anyway, this is a clear, measured book which doesn't overstate its case and is very well-evidenced. Highly recommended/

[Blair · Rating 5 out of 5]

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 is concise. It focuses on how things work and offers evidence to back it up. It is not always in agreement with mainstream economic theory and will point out when it is not.

This is an excellent book and despite the fact that the US and UK have monetary systems that work very similarly I wish they would write a version for the US. Great read to help clarify how the system works for anyone in macroeconomics classes or who is interested in how the economy and banks actually work.

[Malek Atia · Rating 5 out of 5]

“The authors reveal a paradox at the heart of our monetary system: it is the state that essentially determines what money is and underwrites its value and yet it is predominately commercial banks that create it. In deciding who receives credit, commercial banks determine broadly how it is spent within the economy; whether on consumption, buying existing assets or productive investment, their decisions play a vital macro-economic role.”This paragraph at the end of the book sum whats it about

[Ash Moran · Rating 4 out of 5]

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-money loans

The first model is completely wrong, banks do not use deposits to fund loans. What I didn't know was that the second (the "fractional reserve" or "multiplier" model) is no longer in use either. Where Does Money Come From? explains that UK banks have no reserve requirements, and it's only confidence that a loan will be repayed that determines if a bank will make it.

The book goes into quite some detail about how banks use central bank (Bank of England) reserves to settle inter-bank transactions, the open market operations of the Bank of England, the bank account system used by the government, and many other details. While some parts are quite technical, they explanations have many examples and diagrams to simplify it. I never had trouble following the logic of the arguments.

The only weakness of the book is its bizarre decision to include an opinionated view on the nature of money, which is presented with an inconsistent argument. This goes along the lines of: orthodox economics treats money like any other commodity, just one that is widely accepted for exchange; some orthodox economists assumed that there was the possibility of perfect information about the market; perfect information does not exist [correct - it doesn't]; therefore, money cannot be treated like a commodity.

On the basis of this incorrect deduction from association of the first two premises, the authors then proceed to argue that "all money is credit". "As Marx pointed out, in the capitalist money (or capital/financing) is required prior to production" - again, false. Capital is ultimately in the form of goods invested now to increase productivity in the future. It would be no less capitalism if you invested your spare time to build a machine than if you spent money or took out a loan to buy that machine.

The final weakness in the book's description of money is the claim that because the state can demand taxes on threat of violence, and can determine how those taxes will be paid, that the state can create debt by demand for tax payment, and therefore money is debt. This completely ignores the point that freedom of choice is a fundamental requirement of free market capitalism, and that taxation no more defines the nature of money than an armed robber determines the nature of valuable goods. It just so happens that threat at gunpoint in either case increases demand for the requested commodity.

So overall, I want to give the book 5 stars for its brilliantly clear explanation, but I have to temper my review because the book was spoilt for me by the short but significant sections on the nature of money. If you're interested in how money works today, I highly recommend this book, but I'd suggest complementing it with a more consistent explanation of money, such as What Has Government Done to Our Money?. (It appears authors of short books on economics are fond of using question marks in the titles…)

[Jakub Lupták · Rating 4 out of 5]

Very good and concise but sometimes the definitions and explanations are actually a bit lacking.

Main point: commercial banks create money

[Zaeem Arshad · Rating 4 out of 5]

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 which is used as the lubricant of the financial system and the government has little control over the process. The central bank does play a role but its hands are also tied if it subscribes to a free floating market rate instead of a pegged rate regime which is the case today for most economies. It also questions the assumption behind Quantitative Easing (QE) as an inflationary measure, its efficacy and its role in expanding the broader money supply for GDP transactions.

All in all, I highly recommend the book to anyone getting started on the topic. The book does assume some level of financial literacy and could use better organisation of topics to gently ease the readers into a solid narrative.

[Winmonroe · Rating 4 out of 5]

8/10

This book is an excellent and concise summary of the modern modetary system. One can quibble with some of the characterizations here and there, but overall it is accurate and informative in a way that many economics or finance textbooks are not. Perhaps just as impressive, given the subject, is the clarity, conciseness, and accessibility, making it well suited for students or those early in their studies of money, banking, and monetary policy.

[Chris · Rating 5 out of 5]

Role of commercial banks in determining money supply
Commercial banks expand the money supply through originating loans financed by deposits, the money market, inter-bank loans and central bank reserves. The central bank injects liquidity to banks when reluctant to lend amongst each other (e.g. LIBOR spike in 2008) and is a lender of last resort.

"The reality, however, is that when a bank makes a loan it does not require anyone else’s money to do so. Banks do not wait for deposits in order to make loans. Bank deposits are created by banks purely on the basis of their own confidence in the capacity of the borrower to repay the loan."

"The main constraint on UK commercial banks and building societies is the need to hold enough liquidity reserves and cash to meet their everyday demand for payments. This means that the Bank of England cannot control bank money creation through adjusting the amount of central bank reserves that banks must hold, as in the multiplier model. In reality, rather than the Bank of England determining how much credit banks can issue, we could argue that it is the banks that determine how much central bank reserves and cash the Bank of England must lend to them."

"The crash of 2007-08 has been described as a ‘run’ on the shadow banking system: and confidence in the complex structures of unregulated credit creation evaporated'"

"Rather than the Bank of England determining how much credit banks can issue, one could argue that it is the banks that determine how much central bank reserves and cash the Bank of England must lend to them. This follows on from the Bank’s acceptance of its position as lender of last resort, even though it has not fully played this role in the recent bank rescues, such as Northern Rock and RBS, since it passed on the cost of initial central bank money injections to the Government and hence to tax-payers."

Quantitative easing

3 arguments on the effects of QE:

1. Liquidity effect:
"As commercial banks hold significantly higher levels of central bank reserves, it is hoped the additional liquidity will enable them to increase their lending to the real economy, creating credit for new GDP transactions. This is however the weakest part of the argument, as in the past, as evidenced by Japan’s experience, this has not been possible due to banks’ higher risk aversion, triggered by large amounts of non-performing assets."

2. Portfolio rebalancing effect:
"Secondly, due to central bank purchases of such large quantities of government bonds, their availability in the markets decreases. It is then hoped investors will turn to other forms of investment which would support businesses, however, only the purchase of newly issued corporate bonds and equity in the primary market will increase purchasing power of businesses and the primary market is only a fraction of the overall turnover of capital markets."

3. Wealth effect:
"Thirdly, by purchasing gilts on such a large scale, the Bank of England hopes to push up their price and thereby push down the interest rate received by investors. Again, it is anticipated this will make other types of financial assets more attractive and stimulate growth."

Further points against QE:

"However, it may also choose to buy government or corporate bonds from outside the UK, or it may invest in existing financial assets such as previously issued bonds or equities, or derivatives based on commodities such as oil or food, which will have the effect of inflating the prices of these assets. Or it may simply sit on these deposits because of concerns about the future of the economy. Meanwhile, companies that are able to raise additional funds through bond or equity issuance may choose to use the money to simply pay off existing bank debt rather than invest in productive activity. If so, this will have the paradoxical effect of reducing credit creation, and the money supply, by exactly the same amount as QE increased it."

Credit rationing
Commercial banks ration credit by quantity instead of price due to asymmetric information, implying credit markets are supply-side driven and not cleared by an equilibrium interest rate:

"It is therefore more important for a bank to avoid defaults on its loans than it is to earn a higher rate of interest. Higher rates may bring an extra few percentage points’ profit, but a default could lead to a 100 per cent loss. As a result, and as US economists Jaffee and Russel showed in 1976 and as Stiglitz and Weiss showed in 1981, banks prefer to ration and allocate credit – even in the best of times"

"In modern economies, where new money is created by the banking system, the supply of money is driven by credit creation, but credit creation is not driven by the demand for credit. Instead, the credit market is determined by the supply of credit and credit is rationed. It is the quantity of credit supplied, rather than the price of credit, which will determine macroeconomic outcomes and without even perhaps being aware of it, banks are thus in a very powerful position. The total increase, or decrease, in the nation’s money supply is the collective result of their individual lending and asset purchase decisions. In other words, because commercial banks ration and allocate credit, and they create new money in the process, they have a decisive influence over the allocation of new money in our economy."

[Toma · Rating 4 out of 5]

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...

[Kevin · Rating 4 out of 5]

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.

[Jesper Döpping · Rating 4 out of 5]

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

[Jennifer Stone · Rating 4 out of 5]

Very interesting and informative but bit dense for night time reading x

[Yolanda Blanch Ruiz · Rating 5 out of 5]

A must read for everyone. Clear and to the point!

[Walter Cavinaw · Rating 4 out of 5]

Money is one of those technologies most people take for granted - including me - and haven't put in the effort to understand from first principles.

What is the history of money, where does it come from, how does it really work, when does money stop working, and how will it change going forward? These are the questions I have been thinking about recently, and this book helps address the questions on origin and function.

## Summary
Many assumptions made by the majority of people are based on old notions of money. The predecessors to banks were intermediaries but that is no longer the case, when gold certificates were used as money. Then fractional reserve banking was born through the issuance of gold certificates in excess of gold holdings.

There are three types of money, bank notes and coin, central bank reserves and deposits at banks. This third type represents the majority of money and is created and allocated by banks when they extend credit, in effect buying an asset or future income stream. The amount of money the lend out is determined by their confidence in the counterparty's ability to repay. They are incentivized to lend against collateral which can lead to asset bubbles (such as in housing).

Bank reserves are needed for payments between banks. Reserves only constrain lending to the extent that a bank needs to ensure it has enough reserves for settlements between banks. Having more reserves does not necessarily lead to more lending although it facilitates it. When banks do not have enough reserves they can borrow from other banks with excess. The central bank can effect these rates of lending by operating in this interbank market.

One of the consequences of this credit creation theory of money is that non-inflationary growth can be achieved if money is created for productive uses. The author advocates for window guidance for credit creation, and limiting the use of credit for financial transactions. There was also a discussion around alternative currency systems that was interesting.

## Review
The organization of the book could have been better. It jumped from today, to the past, back to today, talked about regulation and government finances and then concluded with how we could improve the system. This was fine but I would prefer: a more linear approach so I don't get lines of though confused; and a higher level view of where we are in our discussion. Most books in general are not very good at guiding the reader and summarizing along the way, but it was pronounced here. Unfortunately there are things I have to unlearn which makes it more difficult to learn and synthesize the information. This inevitably means my summary has some mistakes and I have more reading to do.

Overall though I was very happy and would recommend it to those asking themselves the same questions about money as I am. It also raises some interesting questions in my mind about the nature of banking today with the introduction of cryptocurrencies.

[HJ Hof · Rating 3 out of 5]

Had to decide between three and four stars, three is the final number.

Read this after Professor Werner's recent interview with Tucker Carlson. After a good start I found it ultimately, quite unsatisfactory.

Prof. Werner's initial analysis of the real mechanics of money creation through banks correctly contradicts today's false narratives, e.g. in Bitcoin. (There is a gap, more on this later.)

His view is modernised but not really new, essentially it follows St. Thomas Aquinas treatment of the ursury problem in "Summa" 1270 A.D. where the latter goes in more depth on the mechanism and the moral question. Hartley Withers, 100 years ago, also argues along these lines in "Bankers and Credit".

Another positive: Prof. Werner correctly points to the importance of credit money creation for production, although it seems just a matter of degree for him, only wanting to change the proportions, not the absolute it really is with St. Thomas (and in Bitcredit Protocol).

Like others who take side with the Credit Theory of Money only, his book has a gaping blind spot about the Commodity Theory of Money, the important disciplinary and stabilising role of a sound base money layer like #Bitcoin, which is impossible with the credit based kind of base money, central bank fiat, where Professor Mises's "Money and Credit" is lucid.

Prof. Werner does emphasise the importance of decentralisation of money creation for trade and industry at the right point and time but stops short of the insight that any state power over money will ultimately lead back to centralisation.

Expectably Prof. Werner's book then disappoints in his recommendations. Inconsistently, he proposes a bigger role for central banks instead of liberalisation, the separation of money and state.

He exonerates government without touching the myriad ways in which inept politicians distort our money, issue harebrained regulations to prop up the statists' fragile fiat monstrosity, including the worst sin of all: greedy creation of usurious money for government consumption.

[John Reppion · Rating 5 out of 5]

Post-financial crisis, this book and the work of Richard Werner is so important.

Commercial Banks create credit. Banking regulation that doesnt focus on credit creation is a waste, and it seems from economista down to the average joe, the idea banks simply store money is one of the biggest urban myths of the last three centuries.

It reminds me of my dissertation on the nature of power, yet again a small misunderstanding has catastrophic consequnces when not agreed upon en masse.

The misunderstanding of what banks are and how the system of banking works is cornerstone and this book is a great start for the kinds of financial knowledge I am seeking to gain.

It seems that for the last 300 years what a bank is and does is so misunderstood, from banks, governments and economists to the wider general public where this kind of knowledge is the type we all wish had been taught in schools.

In only 7 chapters and around 160 pages this is foundational reading with very simple learnings that change how you look at money, banks, and the 2008 financial crisis that still haunts the UK.

The only issue - this book is written by intelligent, well written academics. As a consequence, the books format is like that of 7 short academic papers that still layout their thinking the way a university expects.

This books needs to be translated into the type of post-Atomic Habits self help style which the general public digest at a massive rate, and then backed by the fact that if everyone knew this information, banks and governments would make far better decisions and the greatest part is it isnt complicated its just not well proliferated.

Its not always accessible but its still 5 stars, its too important.

[Paul · Rating 5 out of 5]

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 · Rating 5 out of 5]

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 · Rating 5 out of 5]

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.

[Firas Abdulhasain · Rating 4 out of 5]

Very insightful, written clearly and to the point. Simplifying a seemingly complex system. Recommended read to all who want to increase their basic understanding of the world of money, banks, and financials.

[Jeremi Miller · Rating 4 out of 5]

Does well what it sets out to do, with interesting insights into history of banking as a bonus. A non academic reader such as myself will benefit significantly more from reading the far more thrilling “Keystroke capitalism”.

[Tim Huang · Rating 4 out of 5]

An updated and insightful look of the modern monetary system. The book is more Kenyas style economical thinking.

[Jindi · Rating 5 out of 5]

This feels so awesome: Finally understand how money is created within our modern society.

[Pablo Estevez · Rating 5 out of 5]

Excellent explainer. Strikes the difficult balance between being concise and detailed on a complex subject.

[Ramon Feijoo · Rating 5 out of 5]

Really good book to understand the workings of the banking system and get to know the theories of Professor Werner.

[Juston Fenton · Rating 5 out of 5]

Excellent!!!

[Ilia · Rating 5 out of 5]

Very good as an explanation of money. Professor Werner is kind of crazy (anti-covid etc) but here he is fine. Complements with Biography of Money and Coursera Money course

[burak · Rating 5 out of 5]

excellent primer on banking and finance. don't be deceived by the subtitle, it's much broader than just the uk

[Lubomir Christoff]

The most definite guide to modern money and banking. The bulk of money is created by commercial banks with all the implications. All Money and Banking textbooks are rubbish.