Bjerg, O;
McCann, D;
Macfarlane, L;
Hougaard Nielsen, R;
Ryan-Collins, J;
(2017)
Seigniorage in the 21st Century: A Study of the Profits from Money Creation in the United Kingdom and Denmark.
(CBS Working Paper
).
SSRN: Amsterdam, Netherlands.
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Abstract
This paper develops a new theory of seigniorage suited to modern economies where the majority of money is created not by the state or central bank but by commercial banks and other monetary financial institutions via their lending activity. We identify four different forms of seigniorage that take account of the modern institutional separation between the state, the central bank, commercial banks and the non-bank private sector in terms of their identities as ‘money creators’ and ‘money users’. The new typology differentiates between seigniorage profits arising from interest rate spreads on stocks of created money and profits arising from flows of interest payments on newly created assets. We illustrate our theoretical framework with empirical data on commercial bank seigniorage and related variables in the United Kingdom and the Denmark over the past quarter century.
Type: | Working / discussion paper |
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Title: | Seigniorage in the 21st Century: A Study of the Profits from Money Creation in the United Kingdom and Denmark |
Open access status: | An open access version is available from UCL Discovery |
DOI: | 10.2139/ssrn.2921225 |
Publisher version: | https://dx.doi.org/10.2139/ssrn.2921225 |
Language: | English |
Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
Keywords: | Seigniorage, Money creation, Central banks, Banks, Financial intermediation, Interest rates, Financialization |
UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Inst for Innovation and Public Purpose |
URI: | https://discovery.ucl.ac.uk/id/eprint/10142073 |
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