Under competitive note issuance, an individual bank that over-issues faces a reserve drain: notes it issues are received and returned for redemption by rival banks, draining its reserves, which strictly limits how much currency any single bank can create—the same discipline that constrains deposit creation today via check-clearing.
causalpending
Speaker
George SelginEvidence Quote
“competition worked to constrain the amount of currency or bank notes any individual bank in a competitive system could issue that doesn't work if you give one bank a monopoly because it's notes get treated like reserves by other banks”
Created: 6/15/2026, 9:20:23 AM
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