Bank balance sheets, lending and funding
- Bank assets, liabilities and net worth
- Bank lending creates a matching deposit
- The reserve-multiplier model and its assumptions
- Currency preference relative to deposits
- Reserve holdings relative to deposits
- Loan-principal repayment extinguishes deposit money
- Transfers between banks require settlement funding
- Deposit retention and alternative bank funding
- Interest spreads cover costs before profit
- Maturity mismatch creates liquidity risk
- Borrower default creates credit risk
- Capital absorbs unexpected loan losses