What is the Latin for 'Mayonnaise'? A Response to Bagus, Howden and Gabriel

If fractional-reserve demand deposits are common, and illegitimate, an obvious flaw in the banking system is exposed. However, this article maintains that the only reason why demand deposits may be considered illegitimate is because of a way of defining them that renders them almost irrelevant. This...

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Bibliographic Details
Published inJournal of business ethics Vol. 131; no. 3; pp. 619 - 623
Main Author Evans, Anthony J.
Format Journal Article
LanguageEnglish
Published Dordrecht Springer 01.10.2015
Springer Netherlands
Springer Nature B.V
Subjects
Banking
Banking industry
Banks
Business and Management
Business Ethics
Debates
Demand deposit accounts
Dictionaries
Education
Ethics
Insurance policies
Management
Philosophy
Probability
Quality of Life Research
Reserve requirements
Solvency
Studies
Time deposits
Banking
Demand deposits
Fractional-reserve banking
Fraud
Maturity mismatching
100 % reserve requirement
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Summary:If fractional-reserve demand deposits are common, and illegitimate, an obvious flaw in the banking system is exposed. However, this article maintains that the only reason why demand deposits may be considered illegitimate is because of a way of defining them that renders them almost irrelevant. This article provides a response to Bagus et al. (J Bus Ethics, Forthcoming, 2014), and identifies examples of how they misrepresent Evans (J Bus Ethics, Forthcoming, 2013). It also provides further considerations on the tradeoffs relating to the availability of a deposit; methodological subjectivism; and the potential for hybrid contracts. Deposit and loan contracts may be hard to mix, but the actual results of doing so should not be ignored.
ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-014-2299-0