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Where Does Money Come From? (2013)

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Where Does Money Come From? reveals how, contrary to public perception, the bulk of today's money supply is created and allocated by commercial banks in their role as providers of credit. The authors argue that this system is inherently unstable, with little effective regulation of how much credit is provided or whether it is used for productive or speculative purposes. Based on detailed research and consultation with experts, including from the Bank of England, Where Does Money Come From? reviews theoretical and historical debates on the nature of money and banking and explains the role of the central bank, the Government and the European Union. This Second edition includes new sections on Libor and quantitative easing in the UK and the sovereign debt crisis in Europe.

Praise for Where Does Money Come From?

Refreshing and clear. The way monetary economics and banking is taught in many – maybe most - universities is very misleading and what this book does is help people explain how the mechanics of the system work.
—David Miles, Monetary Policy Committee, Bank of England

It is amazing that more than a century after Hartley Withers’s The Meaning of Money and 80 years after Keynes’s Treatise on Money, the fundamentals of how banks create money still need to be explained. Yet there plainly is such a need, and this book meets that need, with clear exposition and expert marshalling of the relevant facts. Warmly recommended to the simply curious, the socially concerned, students and those who believe themselves experts, alike. Everyone can learn from it.
—Victoria Chick, Emeritus Professor of Economics, University College London.

I used Where Does Money Come From? as the core text on my second year undergraduate module in Money and Banking. The students loved it. Not only does it present a clear alternative to the standard textbook view of money, but argues it clearly and simply with detailed attention to the actual behaviour and functioning of the banking system. Highly recommended for teaching the subject.
—Dr Andy Denis, Director of Undergraduate Studies, Economics Department, City University, London