Credit theory

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The credit theory focuses on credit as money . Until 1920, the orthodox credit theory was valid in Germany - that commercial banks as financial intermediaries lend the deposits of savers.

Modern credit theory

From the lending arises available initially also deposit money through an accounting record (a commercial bank books in the form of a balance sheet extension loans [assets] and liabilities [liabilities] against itself - liabilities that are commonly accepted as payment). There is no need to have made deposits prior to lending. However, the condition for a deposit transaction is that a credit transaction has taken place beforehand.

In Germany, the modern credit theory was founded from 1920 by Albert Hahn ( economic theory of bank credit ).

Credit mechanics

Balance sheet pictures for loans ( dashed 1936)

According to Wolfgang Stützel , the third phase of the theory, credit mechanics , represents a kind of synthesis between orthodox and modern credit theory and can be traced back to Wilhelm Lautenbach , Hans Gestrich , Otto Pfleiderer and Leonhard Gleske . Not every credit creation leads to money creation in full. It depends on who receives the cash flows - the extent to which cash flows (from other debtors) resulting from the granting of loans are used to repay outstanding loan debts (excluding interest) - the bank balance sheets are (again) shortened .

To corporate credit needs

Furthermore, the credit mechanics relativizes the classical theory of the crowding-out effect, since loans to private individuals are not viewed as competing with loans to the state (by the banking system), on the contrary. From the credit mechanics results the realization that, in order not to risk an economic slowdown, non-demanding money-saving assets, as long as they are inactivated, withdrawn from purchasing power, have to be compensated by granting credit.

In his balance mechanics , Wolfgang Stützel sums it up: "The entrepreneurial profits always lag behind the entrepreneurial expenditure for consumption and investment by exactly the amount by which the non- entrepreneurs create income surpluses." This means that when monetary surpluses are formed by private non-entrepreneurs (as it usually occurs in the entirety) and at the same time targeted debt relief of domestic companies, this can only be financed by an additional spending surplus of the own and / or a foreign state budget - conversely, budget deficits can only be successfully reduced if other households either pay off (Consume financial assets already formed from accumulated surpluses) and / or increase their surpluses in expenditure.


As early as 1882, Henry Dunning Macleod declared in Lectures on Credit and Banking that banks do not lend any deposits. Other representatives of the theory of credit creation related to the Anglo-Saxon monetary and credit system were Hartley Withers ( The Meaning of Money , 1909, The English Banking System , 1910), Ralph George Hawtrey ( Currency and Credit , 1919) and John Maynard Keynes ( A Treatise on Money , 1930 / Vom Gelde , 1932).

Gold loan money

Loan money

If the "creative bank loan" (from the net borrowing of non-banks) creates additional means of payment, it is now referred to as credit money . Credit money is as old as the material debt itself or as old as the transfer of debt claims for payment purposes. Heinrich Rittershausen points out that income surpluses from conventional forms of lending are also to be understood as credit money . In both cases, there is a surplus of revenue and the same amount of monetary debt.

See also

Individual evidence

  1. Heinz-Peter Spahn: Money Management (PDF; 415 kB)
  2. ^ Deutsche Bundesbank: The banking and financial system. The most important things at a glance: Point 6: "In addition to the banks, other important financial intermediaries in the financial system are also insurance companies and investment funds."
  3. Walter Ehrlicher: Monetary Theory. In: Compendium of Economics . Volume 1. 5th edition. Göttingen 1975, p. 358,
  4. Hans-Werner Wohltmann: Fundamentals of the macroeconomic theory. 4th edition. Munich 2005, p. 165, :
    "Money creation generally takes place when a bank monetizes assets [...]. This means that banks acquire non-cash assets from non-banks (such as foreign exchange or assets in the course of lending to private individuals and the state) and then pay for them with claims against themselves, which constitute cash. "
  5. Hansjörg Herr: Money, credit and economic dynamics in market-mediated economies - the vision of a money economy. 2nd Edition. VVF, Munich 1988, ISBN 978-3-88259-396-9 , pp. 60 f .
  6. ^ Augusto Graziani: The Monetary Theory of Production . Cambridge University Press, 2003, ISBN 978-0-521-81211-5 , pp. 88 .
  7. Wolfgang Stützel: Economic balance mechanics. (2nd edition) Tübingen 2011, p. 219,
  8. Wolfgang Stützel: Economic balance mechanics. (2nd edition) Tübingen 2011, p. 220,
  9. ^ Leonhard Gleske: The liquidity in the credit industry. Frankfurt 1954. p. 53:
    “The amount of money created by the banking system through the
    granting of credit depends crucially on whether the payments of the debtors flow to other debtors or to creditors or, conversely, on whether the payments of the creditors flow to other creditors or debtors. As a rule, an increased granting of credit, an increased use of credit by the banks leads to an increase in the volume of money, but it need not be so. "
  10. Wolfgang Stützel (Ed.), Wilhelm Lautenbach: Zins, Kredit und Produktion (PDF; 1.2 MB), Tübingen 1952, p. 48: "If a creditor pays a debtor, the loan amount shrinks, does a debtor or someone pay who becomes a customer through the payment to someone who is not a customer, the loan amount increases. But it remains the same if a customer pays to another customer or a vendor pays another vendor. "
  11. ^ Hermann Feifel: The applicability of the modern credit creation theory to the special kind of the savings bank business. Berlin 1959, p. 38 f., :
    “Furthermore, the advocates of the theory of the exclusively giral credit creation activity of the banks do not take into account the rules of credit mechanics developed by Lautenbach. Namely, a credit claimed such that the customer pays to another customer, the result is not a new demand deposit. A new sight deposit can only be created if the customer pays to a vendor when the loan is drawn down . "
  12. ^ Ewald Nowotny: Reasons and Limits of Public Debt. In: Economics in theory and practice. Berlin, Heidelberg 2002, p. 261, :
    "Typically, private households have considerable surpluses (net savings)."
  13. Wilhelm Lautenbach: Zins, Kredit und Produktion (Ed. Wolfgang Stützel), Tübingen 1952, p. 49: “The entrepreneur's need for credit arises here precisely from the fact that non-entrepreneurs save, regardless of whether they are private or public is [...]. "
  14. Hans Gestrich: Neue Kreditpolitik (PDF; 652 kB), Stuttgart and Berlin 1936, p. 61: “If the modern theory of money and credit has to correct something that is traditional, it is a certain purely quantitative way of looking at things from this it follows that traditional theory imagines the credit that can be made available as a rigidly limited supply. Followers of this idea may therefore be astonished that at the peak of an economy, when the amount of cash and central bank money as well as bank money based on bank credit is greatly increased, the interest rate is high, while at the end of a depression, where the circulating Cash and deposit is reduced through repayments and consolidation, the interest rate is low. "
  15. ^ Leonhard Gleske: The liquidity in the credit industry. Frankfurt 1954. p. 41:
    “The term bank credit has a further content in this context. It does not only include short-term bills of exchange and overdrafts, but also long-term loans and investments of all kinds in the bank balance sheets, insofar as they are offset by deposits and obligations of the banks not arising from the issue of securities. In this sense, bank loans also include the mortgages and securities listed on the assets side of the bank balance sheet, in particular mortgage bonds, industrial and municipal bonds, government bonds and stocks. It is not customary to include securities in the bank loan volume, but if they are in possession of the banking system, their economic character allows such an interpretation. "
  16. ^ Wilhelm Lautenbach: About credit and production. Frankfurt 1937 (first published in 1936 in the quarterly issue : Die Wirtschaftskurve. Issue III. ), P. 18:
    “How does the credit apparatus work when the state finances large expenditure through credit? Where
    the money come from? ” “ Most of the people who ask the question, and it is by no means just laypeople, think that there is some limited supply of money or credit. This notion is usually linked to the worried question whether the state might not tighten credit for the economy through its credit claims. In truth, however, it is exactly the opposite. When the state takes credit on a large scale, the entire credit economy is loosened up. The money and credit markets are becoming liquid, entrepreneurs are becoming liquid, their bank loans are decreasing, business deposits are increasing [...]. "
  17. ^ Wilhelm Lautenbach: Interest, credit and production. (Ed. Wolfgang Stützel) Tübingen 1952, p. 62: “If the saved amounts are kept as deposits with the banks, ceteris paribus the liquidity [of the overall banking system] deteriorates. The credit volume grows with the same fund, so that the ratio of total deposits to fund deteriorates. For if the savers had not saved but spent their income, the amounts of money would inevitably have come to the banks in the same way after they had flowed through the retail trade; the banks' cash holdings would have been the same, but the credit volume would have been lower, because the amounts spent for consumption would have been collected by entrepreneurs, with the result that their credit needs would have been correspondingly lower, but their sales would have been higher. That is a paradoxical result in every direction. Earnings, liquidity and, as a result, the propensity to invest are greater when wage earners save less. Saving is only just generating the need for credit with reduced sales, and conversely, when savers consume earlier savings, the liquidity of both banks and companies is increased and at the same time the entrepreneur's income. "
  18. Wolfgang Stützel: Economic balance mechanics. (Reprint of the 2nd edition) Tübingen 2011. P. 80.
  19. Heinz-J. Bontrup based on data from the overall financial accounts of the Deutsche Bundesbank, Tab. 8, p. 26, (PDF)
  20. ^ Ewald Nowotny: Reasons and Limits of Public Debt. In: Economics in theory and practice . Berlin / Heidelberg 2002, p. 261, :
    “From an economic and political point of view , the mandatory
    balance-mechanical relationship that a policy to reduce budget deficits ( “ budget consolidation ” ) can only be successful if it succeeds To reduce the financial surplus of private households (e.g. through increased private consumption) and / or to increase the willingness of companies to borrow (e.g. through investments) and / or an improvement in the current account (e.g. through additional exports) to reach."
  21. ^ Henry Dunning Macleod: Lectures on Credit and Banking  - Internet Archive . London 1882.
  22. ^ Hans Christoph Binswanger: The Growth Spiral: Money, Energy and Imagination in the Dynamics of the Market Process. Berlin and Heidelberg 2013, p. 38,
  23. ^ Hans Gestrich: Credit and saving. Jena 1944 (1st edition) p. 107.
  24. Hartley Withers: The English Banking System  - Internet Archive Washington 1910.
  25. ^ Hermann Feifel: The applicability of the modern theory of credit creation to the special kind of savings bank business. Berlin 1959. p. 28.
  26. ^ RG Hawtrey: Currency and Credit  - Internet Archive . London 1919.
  27. John Maynard Keynes: On Money. (1930/1932) 3rd edition. Berlin 1983. p. 18 f:
    “Such a bank creates claims against itself for the surrender of money, or, as we will later call this fact, it creates deposits. […] But there is a second way in which the bank can create a claim against itself. It can buy values ​​itself, that is to say, increase its investments and, at least initially, settle this purchase by granting a claim against itself. Or the bank can create a claim against itself in favor of a borrower against his promise of later repayment; that is, it can give loans or advances. In both cases, the bank creates the credit. "
  28. ^ Hermann Feifel: The applicability of the modern theory of credit creation to the special kind of savings bank business. Berlin 1959, p. 18,
  29. Loan money: in the broader sense, all money without its own (material) value. In the past also credit coins (pieces of money whose metal value was considerably below the face value). See Helmut Kahnt, Bernd Knorr: Old measures, coins and weights. A lexicon. Bibliographisches Institut, Leipzig 1986, licensed edition Mannheim / Vienna / Zurich 1987, ISBN 3-411-02148-9 , p. 386.
  30. John Maynard Keynes: On Money. (1930/1932) 3rd edition. Berlin 1983. p. 12 f .:
    "Because the use of bank money depends on nothing other than the discovery that in many cases the transfer of debts is just as useful for the processing of business as the transfer of money, to which those are called. A claim to debt is also a claim to money, and insofar as one relies on the prompt exchange of a debt instrument for money, the element of distance does not play a role in the suitability of bank money for conducting business. In the old world, bank money in the form of bills of
    exchange was no less suitable and necessary than it is today for the purposes of doing business over long distances, because of the low costs of transmission compared to the costs and risks of transporting cash. "
  31. See Heinrich Rittershausen: Bankpolitik. An examination of the border area between credit theory, price theory and economic policy. Frankfurt 1956.