Brad DeLong's Semi-Daily Journal
What’s a bank? The conventional old-style definition is that a bank is an entity that (a) takes deposits and (b) makes loans.
Delong: I would say this: I think a bank is something (a) takes deposits, (b) provides loans, (c) pretends to its depositors that their money (its liabilities) are more liquid than its assets, (d) collects net interest as a result, and (e) gets away with it almost all the time.
Saturday, August 25, 2007
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