TeachMeFinance.com - explain Clearing house currency
Clearing house currency -- As one means of securing an
elastic asset currency which would be entirely safe and at the
same time responsive to the needs of business it is proposed
by some that the privilege of emitting circulating notes be
taken from the individual banks and delegated to clearing
houses. This, it is urged, would place behind the notes the
combined strength of the associated banks and would also do
away with any danger of reckless emissions of notes by poorly
managed or weak institutions.
Further, the advocates of this system think it would be
easier in this manner to regulate the volume of currency to
the demands of a community or state than by means of
numerous issues of banks acting independently.
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