Monnet, Cyril; Sanches, Daniel R. - Federal Reserve Bank of Philadelphia - 2015
We show that a competitive banking system is inconsistent with an optimum quantity of private money. Because bankers … for transaction purposes. If the banking system is monopolistic, then an efficient allocation is incentive-feasible. In … this case, the members of the banking system obtain a higher return on assets, making it feasible to pay a sufficiently …