Issue #16: The Origins and Evolution of the Modern Monetary System

Part 3: "Liability Management" – The Re-Emergence of Wholesale Finance (The Eurocurrency/Eurodollar Banking System)

Recall that there are a few fundamental innovations that have radically transformed our monetary and banking system in the post-WWII era:

1. Liability Management (a.k.a. “wholesale finance”) – the expansion of banking strategy that transformed banks from passive acceptors of deposits to aggressive operators in the money market. This includes federal funds b…