Seth Carpenter
Associate Director
Division of Monetary Affairs
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue NW, Washington, DC 20551
scarpenter@frb.gov
scarpenter@frb.gov
and
Selva Demiralp
Associate Professor
Department of Economics
Koc University
Rumeli Feneri Yolu
Sariyer, Istanbul 34450 Turkey
sdemiralp@ku.edu.tr
“Second, there is no direct link between money—defined as M2—and bank lending. Banks have access to non-deposit funding (and such liabilities would also not be reservable), so the narrow bank lending channel breaks down in theory.”