RTGSsystem operated by the central bank to settle interbank claims.Bank A and Bank B seek to minimize the cost of making …

We find that bank liquidity creation (LC) is statistically and economically significantly positively related to real … economic output (GDP). This is robust to using instrumental variables and many robustness checks. LC also beats bank assets in … bank LC generates more GDP per dollar than large bank LC, but large bank LC matters more overall because large banks …