“The way monetary economics and banking is taught in many – maybe most – universities is very misleading.”
Professor David Miles, Monetary Policy Committee, Bank of England
Universities often teach ideas about money and banking that have been out of date for decades. If you’re a student in economics, banking or finance, make sure you’re understand how banks really work today, and how that affects the main social and economic challenges that we’re facing today.
1. Educate Your Professor
This Bank of England paper explains how money is created by the banking system, and highlights the ways in which the textbooks are wrong:
Send it to your professor and ask them to integrate it into their lectures on money creation or the money multiplier. If they’re currently using any textbook other than those by Howells & Bain, then they’re likely to be teaching an inaccurate version of how the banking system works.
2. Reading & Training
Get a copy of Where Does Money Come
From? – Whereas most undergraduate textbooks are based on theories about banking that are completely out of date, this book is based on original documents from the Bank of England, and was referenced in the Bank of England’s recent paper on money creation.