Your assignment is to prepare and submit a paper on the uk banking system has some ability to supply money endogenously by relying on liabilities to satisfy an increase or decrease in loan demand what

Your assignment is to prepare and submit a paper on the uk banking system has some ability to supply money endogenously by relying on liabilities to satisfy an increase or decrease in loan demand what would accommodate an increase or slowdown in economic activity.however, banking firms are limited in this. However, in addition to this internal sustainability, the definition also requires external sustainability: we must live within ecological bounds and at the same time build up an efficient and resilient society to be able to remain within these natural limits. It requires a stabilization of the natural and human system , as opposed to an overshoot and collapse. One can characterize such a societal lifestyle as one in which there is ‘human dignity’ (van Egmond and de Vries, 2011).

The money system is interpreted as the form that money takes, and the way it is brought in to circulation. The standard approach to this system, as discussed in almost all economic textbooks, is that central banks control the money supply by means of their base money, which banks can expand by means of the money multiplier model (Mishkin, 2009). However, new arguments claim money is based on credit, created by commercial banks, and brought into the economy endogenously at the demand of the market (Wray, 1998). A greater demand for money hereby increases credit, of which debt is the other side. This strand of thought judges the money we utilize on a day-to-day basis, as bank debt, and thus for almost every Pound, Euro, or Dollar in existence someone has to go into debt with a bank.

It is clear that money as debt is nothing new, but that in the evolution of this form of money, the banking system has gained an increasingly important role in our payments system as compared to the State. In this process, it has also become more relevant for sustainability because of its role in deciding where New money (purchasing power) enters the current economic system first.

A number of different negative effects that our money system may have on society and sustainable development exist. These are considered as transmission mechanisms between the nature of money and (un)sustainable development.