Vocabulary List: __________________________________________________

Date: 2015-10-07; view: 452.

Bank Money

Base Money

Fiat money held by the private sector is known as the monetary base, which we will refer to as base money. The Fed issues base money when it buys securities from the public for its own portfolio, mainly Treasury debt. It pays by simply creating a deposit at the Federal Reserve Bank for the seller's own bank. This is known as monetizing the debt.

Banks create deposits, known as bank money, when they issue loans by simply crediting the borrower's account with a new deposit. The total amount of bank money increases when a bank issues a loan. When a loan is paid off, that amount of bank money vanishes.

The value of bank money is based on the promise that it can be converted on demand into base money at par. Current rules require a bank to hold reserves of base money equal to at least 10% of its transaction deposits. Reserves can be held in any combination of vault cash and deposit at the Fed. There is no required reserve for other bank liabilities, such as savings accounts or certificates of deposit.

(2154 symbols)

token – знак, символ

medium of exchange - средство (международных) расчетов

сommodity – товар

bullion ['bulɪən] – слиток золота, серебра

intrinsically [ɪn'trɪnzɪk(ə)lɪ] – по сути, по существу, в сущности;

endow [ɪn'dau] – наделять

fiat money ['faɪæt] – бумажные деньги

underlying – базовый, основной

issuer ['ɪʃuːə] – эмитент, организация, выпускающая в обращение акции, ценные бумаги, кредитные карточки

tax credit – налоговая скидка

legal tender – законное платёжное средство

tax liability – налоговая ответственность

securities – ценные бумаги

base money – денежная масса

Treasury – казначейство, Министерство финансов

bank money – деньги банковского оборота, деньги безналичного расчета

loan – заем ссуда

at par – альпари, по номинальной стоимости

transaction – сделка, операция

vault cash – денежная наличность