Journal of Business Ethics

, Volume 131, Issue 3, pp 619–623

What is the Latin for ‘Mayonnaise’? A Response to Bagus, Howden and Gabriel

Article

DOI: 10.1007/s10551-014-2299-0

Cite this article as:
Evans, A.J. J Bus Ethics (2015) 131: 619. doi:10.1007/s10551-014-2299-0

Abstract

If fractional-reserve demand deposits are common, and illegitimate, an obvious flaw in the banking system is exposed. However, this article maintains that the only reason why demand deposits may be considered illegitimate is because of a way of defining them that renders them almost irrelevant. This article provides a response to Bagus et al. (J Bus Ethics, Forthcoming, 2014), and identifies examples of how they misrepresent Evans (J Bus Ethics, Forthcoming, 2013). It also provides further considerations on the tradeoffs relating to the availability of a deposit; methodological subjectivism; and the potential for hybrid contracts. Deposit and loan contracts may be hard to mix, but the actual results of doing so should not be ignored.

Keywords

100 % reserve requirement Banking Demand deposits Fractional-reserve banking Fraud Maturity mismatching Time deposits 

Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  1. 1.ESCP Europe Business SchoolLondonUK