IDEAS home Printed from https://ideas.repec.org/p/rtr/wpaper/0269.html
   My bibliography  Save this paper

A Functional Analysis of the Banking Industry

Author

Listed:
  • Riccardo Zolea

Abstract

This paper proposes a functional analysis of input, output and capital of the banking sector in an endogenous money framework with the aim of determining the aggregates on which to calculate the bank profit rate. Although banks create bank money, State money is not producible by banks, which need it as an input. Deposits are the cheapest source of central bank money already in the system, so it can be argued that deposits are inputs to the banking industry. Assuming that loans are the banking output, we investigate what role regulation plays in defining a banking production technique. The framework developed from Basel Accords imposes a level of equity proportional to the level of risk-weighted bank assets. Thus, a bank capital-to-output ratio defined by these rules is conceivable.

Suggested Citation

  • Riccardo Zolea, 2022. "A Functional Analysis of the Banking Industry," Departmental Working Papers of Economics - University 'Roma Tre' 0269, Department of Economics - University Roma Tre.
    • Handle: RePEc:rtr:wpaper:0269
    as

    Download full text from publisher

    File URL: https://economia.uniroma3.it/wp-content/uploads/sites/5/file_locked/2022/06/WP_269.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Bank; deposit; capital; input-output analysis; post-Keynesian approach; MMT.;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rtr:wpaper:0269. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Telephone for information (email available below). General contact details of provider: https://edirc.repec.org/data/dero3it.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.