A Comment on Barnett and Block on Time Deposit and Bagus and Howden on Loan Maturity Mismatching

Journal of Business Ethics 104 (2):219-221 (2011)
In Time Deposits, Dimension, and Fraud (2009), William Barnett and Walter Block argue that by borrowing short and lending long there is an over issuance of property rights. Their article, however, does not fully extend the consequences of their contribution. Once this is done, it becomes clearer that their argument suits a great impediment to banking, becoming a possible reason to support rather than to oppose fractional reserve banking. Bagus and Howden (J Bus Ethics 90(3):399–406, 2009) comment on Barnett and Block (J Bus Ethics 88(4):711–716, 2009), the authors claim that while maintaining the illegitimacy of fractional reserve deposits, borrowing short and lending long it is actually not illegitimate. An extension on Bagus and Howden (2009) will show that their line of argumentation can be applied as a defense of fractional reserve banking as well
Keywords Time deposits  Fractional reserve banking  Maturity mismatching
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DOI 10.1007/s10551-011-0900-3
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References found in this work BETA
Time Deposits, Dimensions, and Fraud.I. I. Barnett & E. Block Walter - 2009 - Journal of Business Ethics 88 (4):711-716.

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Citations of this work BETA
The Continuing Continuum Problem of Deposits and Loans.Philipp Bagus & David Howden - 2012 - Journal of Business Ethics 106 (3):295-300.
Fractional Reserve Banking, Client Collaboration, and Fraud.Malavika Nair - 2015 - Journal of Business Ethics 130 (1):85-92.

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