It is helpful at this point to consider the big picture, the underlying political economy of bank capital. In a laissez faire world with no central bank and no financial regulation, banks would sink or swim with no expectation of being bailed out by the state or its agencies if
The Kaldor-Pasinetti equation has a much deeper meaning than is commonly believed. It describes the fair distribution of total income between capitalists and workers.
Central banking is familiar to most people, at least on a practical level, as the monetary system of their country. A central bank is a monetary authority that has discretionary monopoly control of the supply of the reserves of commercial banks.