Ilseop Lim

“Unlike the quantity theory of money, which is a ‘supply of money’ story, the credit theory of money is a ‘demand for loans’ tale. The amount of money fluctuates with the demand for loans and the creditworthiness of borrowers; and both fluctuate with the state of business.”
― Robert Skidelsky, Money and Government: A Challenge to Mainstream Economics

“Low-quality mortgages ended up imperiling the entire financial system—not so much because of the direct losses on the mortgages themselves, which were significant but likely manageable, but because of the securitization boom, which carved those mortgages into securities that became a ubiquitous form of currency and collateral throughout the system.”
― Ben S. Bernanke, First Responders: Inside the U.S. Strategy for Fighting the 2007-2009 Global Financial Crisis

“Under the current US system, federal deposit insurance is capped at $250,000 per account.24 This coverage limit reflects a consumer protection philosophy; small retail account holders presumably lack the capacity to monitor bank solvency. But if we view deposit insurance through the lens of panic prevention instead of consumer protection, then the justification for coverage limits becomes far murkier. As we will see in future chapters, sophisticated institutional accounts are far more likely than small retail accounts to redeem en masse, precisely because they are paying closer attention. If panic prevention is a key goal, then coverage limits may very well undermine it.”
― Morgan Ricks, The Money Problem: Rethinking Financial Regulation

“And while the FDIC had emergency authority to wind down failing commercial banks in a swift and orderly fashion, no one had the authority to step in to avoid a chaotic bankruptcy of a major nonbank, to inject capital into a nonbank, or to guarantee its liabilities.”
― Ben S. Bernanke, First Responders: Inside the U.S. Strategy for Fighting the 2007-2009 Global Financial Crisis