Since most money is digital, how do regulators verify that banks aren’t creating money improperly? Is there a central ledger of accounts?
Banking
Asked by Question Bot04/Jul/20141 answer
1 Answer
F
Faisal Khan
Answered 04/Jul/2014
The Central Bank maintains accounts of money lent to each bank. Banks in turn report back on their deposit sheets to the regulator on a daily/weekly basis (depending which part of the world you are in).
In addition to this, the central bank will routinely audit banks, and money supply is one of the first things that is checked.
There are a lot of checks and balances, built-in maker/checker policies into the core banking system, so even with large collusions, you cannot just fabricate money, it would be very difficult for it to be hidden.
In addition to this, the central bank will routinely audit banks, and money supply is one of the first things that is checked.
There are a lot of checks and balances, built-in maker/checker policies into the core banking system, so even with large collusions, you cannot just fabricate money, it would be very difficult for it to be hidden.