MMT claims that it uniquely explains how economies really work, including the government's relationship with money. It is wrong on both. In Australia, the government is responsible for fiscal policy, and the Reserve Bank of Australia (RBA) is responsible for monetary policy. The RBA's monetary policy and the implementation of monetary policy is determined by the RBA. The RBA is independent of the government. Fractional reserve lending is no longer subject to formal controls by the RBA, and has not been subject to any such controls since the early 1990s when the RBA switched from Money Supply to the Target Cash interest Rate as the exogenous instrument of monetary policy. Formal controls such as deposits of reserves at the RBA subject to a minimum required ratio of reserves to total bank deposits still exist at the Fed in the US, but not at the RBA in Australia. Commercial banks in Australia are required to hold exchange settlement balances and precautionary balances in Exchange Settlement Accounts (ESAs) at the RBA. Exchange settlement balances must be sufficient to clear interbank liabilities and liabilities with other account holders at the RBA, including the Government, at settlement each day., and its precautionary balances must nor fall below zero. The commercial banks detemine and manage the balances they hold in the ES accounts at the RBA, not the RBA. That is the core aspect of the relationship of the central bank in Australia with money, but you will not hear about any of thisfrom MMT, which has still not caught up with the changes that occurred in the early 1990s. It still talks about the Money Supply being exogenous, and a money multiplier linking the money base and money supply in Australia. That all changed in the early 1990s. Those formal controls have been replaced with prudential regulation.
