Sunday, 1 May 2016

Bank accounting and Money creation - The Rabbit in the hat BOOK

The Rabbit in the hat – bank accounting and money creation, wants to be a book that puts order in the topic, perhaps the first exclusively dedicated to the subject, at least in Italian. However, it is the first text to have a comprehensive analysis of all aspects of the creation of bank money, from accounting to legal ones, and the individual movements of money on the bank balance sheet in order to reconstruct, accurately, each accounting entry that allows banks not only to create their own means of payment to be used in the economy, but also to keep it in order to take advantage of monopoly situations.

The rabbit in the hat, in the title, wants precisely describe a sort of magician's trick, with which the banking system is able to produce an asset out of nothing without any business cycle. The money creation process is described in the preliminary analysis, in all the elements, from the contiguity between legal and bank money, to the accounting standards, reported and commented in a long chapter, passing by the inter-bank payments and clearing houses, where the trick of the magician acts before to put back the bank money in the balance sheet without destroying it. Attention is also given to "off balance sheet operations", a place outside the rules, where transit some monetary volumes largest of those shown in the financial statements, and to the reserves in liabilities, where the banks' owners can collect their shares.
A book that wants to be analytical but also help with the solution proposed by the various monetary reform movements.

Daniele Pace is a writer and independent researcher, has always been involved in the theme staunch supporter of the legal means of money.
In 2012 he published "The Utopian Money" by offering a future vision of free money from the debt and the Central Powers. He then wrote the comic book "Dialogues with Auriti" in 2014, for a disclosure in the simplest form on the theory of the ownership of money.
In 2015 it is the publication of "The Fruiterer Conspiracy", logical and critical analysis of the Quantitative Theory of Money that would, from about 3 centuries, inflation linked to the money supply, without any empirical evidence.

In Italy is a speaker at many conferences, as well as having the informational space in the web TV Salvo5puntozero.

Table of Contents

The existence of bank money and the data
1. Monetary base and bank money
1.1 The definition of money and monetary aggregates
1.2 The difference between the monetary base and bank money
1.3 The bank money between "sight debt" and deposit
2. The bank deposit and the Italian Civil Code
3. The Bank Balance sheets
4. Accounting definitions in the International Standards
4.1 The double entry accounting
4.2 The audit and control of the balance sheet
4.3 Useful definitions in international accounting standards
4.4 Money and accounting recognition. Because the bank does not
     destroy the money
4.5 Accounting definitions and creation of deposit money. Because
     the bank can create money
4.6 Accounting definitions. Conclusions
5. Money creation and credit
5.1 The money multiplier and the recognition criteria
5.2 The potential of the monetary deposit multiplier
6. The restrictions to the monetary creation
6.1 The liquidity reserve requirements (LRR)
6.2 The liquidity risk
7. Inter-bank payments
7.1 The establishment of the modern clearing house
7.2 The national clearing system
7.3 TARGET 2
7.4 The PM and HAM accounts
7.5 The Intraday credit
7.6 E-MID
7.7 Conclusions


8. The rabbit in the hat
8.1. A medieval practice: the fairs and the first clearing
8.2. The clearing house and bank balance sheet
9. The accounting entries from the creation to the repayment
    of the loan
9.1.1. The customer α asks € 100 loan to the bank A
9.1.2. Α the customer pays € 100 to a supplier, customer β of
     the bank B
9.1.3. The netting at the end of the day: Bank A pays € 100 to
     the bank B
9.1.4. The netting at end of the day: The bank B receives € 100
     from Bank A
9.1.5 The customer α returned the € 100 loan to the bank in cash
9.1.6 The customer α returned the € 100 loan to the bank A
     via current account
9.2. The dynamism of interbank payment flows
9.2.1 Adjustment of budgetary imbalances
9.2.2 The balance equity with funding from the loan
9.2.3 The off-balance sheet
10. The Reserves
11. Simplified framework
12. Taxes, failures and solutions
12.1 The banks pay taxes?
12.2 Banks can fail?
12.3 The solutions
13. Conclusions

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