(Shadow) money without a central bank: towards a theory of monetary time

Since (at least) Keynes we think of money as a time machine that links the irrevocable past to the uncertain future by credibly storing value. But time as shorthand for uncertainty downplays its role in the emergence of new forms of money. Instead, this paper theorizes monetary time as the set of practices through which the state and private finance order time on their balance sheets in the process of creating credible promises to pay at par. While time makes money, there is no unique temporal order that characterizes money/credit creation in capitalism. Rather, monetary time varies across different modes of organizing credit creation, in relationship banking vs market-based finance where credit is created via securities markets and financed through shadow money, promises to pay backed by collateral securities. The alchemy of (shadow) banking is the alchemy of monetary time, of money that can extinguish time without the state. To illustrate, the paper explores the money-time order perfected by New York broker-dealers in the call market that powered the American credit machine before the creation of the Federal Reserve in 1913. Brokers developed practices for daily re-pricing of collateral securities that rendered call (shadow) money credible stores of value. The day-based temporal order allowed brokers to pump credit into circulation via securities markets, liquidity into the payment system and moneyness into bank and paper money.