The literature compares
two theories of banking. The first, known as the monetary theory,
represents the bank’s typical activity as the joint
production of credit and money: the bank grants credit by giving the
customer the ability to spend its own specifically issued sight
liabilities, which are universally accepted in payment. The second, by
contrast, represents the bank as a credit intermediary that obtains
third-party funds in the form of debt and transfers them, as loans, to
customers requesting credit.The foundational concepts of the two
theories could hardly be more distant. Each argument is supported by
references to scholars in the field, from the origins of the debate
onwards. This makes it possible to grasp the evolution of the economic
thought underlying the theories in question, as well as its contingent
motivations.Finally, brief consideration is given to the possible
destabilising consequences arising from the anticipated introduction of
new digital currencies, both public and private, and from the
associated overcoming of the nearmonopoly regime of bank money.
