Encyclopedia > Credit money

  Article Content

Credit money

Credit money is money that is backed by a promise to pay other than that of the state.

Examples of credit money: bank deposits, credit card loans.

During the Crusades in Europe, precious goods would be entrusted to the Catholic Church's Knights Templar, who effectively created a system of modern credit accounts. Over time this system grew into the credit money that we know today, where banks create money by approving loans - although the risk and reserve policies of each national central bank sets a limit on this.

Sometimes, as in the U.S.A. during the Great Depression, trust in bank policies drops very low and government must intervene to keep the industry of credit in operation.

This is a stub article: please write more on this subject

See also:

External references:

All Wikipedia text is available under the terms of the GNU Free Documentation License

  Search Encyclopedia

Search over one million articles, find something about almost anything!
  Featured Article
List of intelligence agencies

... of Naval Intelligence Government Communications Headquarters (GCHQ) Joint Intelligence Committee (JIC) MI8 (Defunct) Secret Intelligence Service ...

This page was created in 32.8 ms