Re: Banks vs Capital Markets

["Kazuhiro Kurose" <kurose@xxxxxxxxxxxxxxxxxxxxxx>]

Dear Henry C.K. Liu and others

Thank you very much for telling me the date source. And you answered my question as follows.

> >From my simplistic point of view, according to Levy, money is created by credit.  The capital market, through the
> securitization of debts, is taking credit market share from banks. ......
> Whether
> economists recognize it or not, the capital markets affect fundamentally the money supply.  Yet only the banks' share
of the
> credit market is regulated by the Fed through reserve requirments and discount rates and ff rates.

I can understand that the phenomena of 'Seculitization' from 1980's affect banks' share in credit markets. But it don't
occurred to me that the relation between capital markets and money supply. So I would like you to tell me more concrete.

Sincerely

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  Kazuhiro Kurose
  Hokkaido University, Faculty of Economics
    Kita 9 Nishi 7, Kita-Ku, Sapporo, Japan
    060-0809
    TEL: ++81-11-716-2111 ex:2786
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