Block, Siteadmin, SkipCaptcha, Upload, Automoderated users, delete, edit, move, nsTeam2RO, nsTeam2RW, nsTeam2_talkRO, nsTeam2_talkRW, protect, rollback, Administrators, template
292,404
edits
Changes
Jump to navigation
Jump to search
Line 15:
Line 15: − + − +
→=Reserve requirements
Friedman and Schwartz argued that all this was due to the Fed's failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply.<ref>[http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/ The Great Depression According to Milton Friedman]</ref>
Friedman and Schwartz argued that all this was due to the Fed's failure to carry out its assigned role as the lender of last resort. Rather than providing liquidity through loans, the Fed just watched as banks dropped like flies, seemingly oblivious to the effect this would have on the money supply.<ref>[http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/ The Great Depression According to Milton Friedman]</ref>
===Reserve requirements==
===Reserve requirements===
A reserve requirement is that portion of a bank's daily receipts in deposits that must be held in reserve and not available for its daily lending activities. By tightening reserve requirements, less money is available for lending, and by loosening reserve requirements more money is available for business and consumer lending.
A reserve requirement is that portion of a bank's daily receipts in deposits that must be held in reserve and not available for its daily lending activities. By tightening reserve requirements, less money is available for lending, and by loosening reserve requirements more money is available for business and consumer lending.
==Criticism==
==Criticism==