Time Deposits, Dimensions and Fraud
6 Pages Posted: 22 Jul 2011
Date Written: July 19, 2011
We stipulate, arguendo, that fractional-reserve-demand deposit banking is per se fraudulent. We ask whether or not time deposit banking can also be illicit, and answer in the positive, if there is a mismatch between the time dimensions of deposits and loans. To wit, if an intermediary borrows short and lends long.
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