Question by steve: Financial Query industrial banks?
When industrial banks have excess reserves, they can generate funds and increse the Nation’s funds supply. List two transaction carried out by commercial banks, when they create money, (i.e. list two items they do with the cash they produce).
a. Commercial Banks will
b. Industrial Banks will

Ideal answer:

Answer by simplicitus
http://wfhummel.cnchost.com/moneybasics.html
http://en.wikipedia.org/wiki/Fractional-reserve_banking

In reality, banks never start off with the reserves they make the loans and then cover the reserve requirement
http://en.wikipedia.org/wiki/Endogenous_cash

And most loans that produce money are not made by banks with reserve requirements at all but by the shadow banking method, which isn’t regulated by the Fed
http://en.wikipedia.org/wiki/Shadow_banking_system
http://www.npr.org/blogs/cash/2010/07/14/128511585/shadow-banking-is-nevertheless-larger-than-classic-banking

http://en.wikipedia.org/wiki/Securitization
http://en.wikipedia.org/wiki/Asset-backed_safety
http://en.wikipedia.org/wiki/Mortgage-backed_securities

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