Some people may be asking, what was all this about?
The answer to this question, when one thinks for a moment about it, is that although the discussion ended by being about whether commercial banks do create money or not, it should have been about the degrees of freedom with which commercial banks create money.
According to a model, money creation by the commercial banks is restricted by the need for deposits and reserves while according to another they are much less restricted since deposits are a consequence and not the cause of the creation of money. This because according to second model money is created out of thin air.
This, of course, has implications at the macro level, which appear discussed in several papers accessible via the internet.
Curiously, at no time have I seen any suggestion of nationalization of the commercial banking sector. In 1982 most of the private banking sector in France was nationalized on the grounds that it would restore the power of money creation to the "collectivity" and produce a better economic policy.
