credit multiplier

Note that the credit multiplier in this case is only eight.

The expression is sometimes represented by and referred to as the bank credit multiplier.

There must have been other factors present to account for the size of deposits created by the credit multiplier effect described earlier.

As shown above, an increase in the cash reserves ratio reduces the credit multiplier.

What do these values suggest about the size of the bank credit multiplier in the UK?

Support for particular renewable technologies, either through credit multipliers or technology set-asides, poses challenges.

In practice, the credit multiplier in the United Kingdom is not as large as the above example suggests because of leakages.

It follows that there is an inverse relationship between the cash ratio and the credit multiplier and, therefore, the volume of bank credit.

Thus, in this example, the credit multiplier (the figure any increase in cash deposits has to be multiplied by to obtain the increase in total deposits) is ten.

Not all states have set-asides or tiers (some preferring to promote particular technologies through credit multipliers) and each state that groups technologies together in a tier does so differently.

Some state programs, in order to promote specific renewable technology types, apply a credit multiplier by which a MWh of electricity produced by a particular technology receives more than one REC.

This fits into the old theoretical view about the credit multiplier according to which the sequence of money creation goes from the primary liquidity created by central banks to total money supply created by banks via their credit decisions.