Journal of Business Ethics

, Volume 106, Issue 3, pp 295–300 | Cite as

The Continuing Continuum Problem of Deposits and Loans

  • Philipp Bagus
  • David Howden


Barnett and Block (J Bus Ethics 18(2):179–194, 2011) argue that one cannot distinguish between deposits and loans due to the continuum problem of maturities and because future goods do not exist—both essential characteristics that distinguish deposit from loan contracts. In a similar way but leading to opposite conclusions (Cachanosky, forthcoming) maintains that both maturity mismatching and fractional reserve banking are ethically justified as these contracts are equivalent. We argue herein that the economic and legal differences between genuine deposit and loan contracts are clear. This implies different legal obligations for these contracts, a necessary step in assessing the ethics of both fractional reserve banking and maturity mismatching. While the former is economically, legally, and perhaps most importantly ethically problematic, there are no such troubles with the latter.


Banking Fraud Fractional reserves Maturity mismatching Natural law Loans and deposits Continuum problem Claims to future goods 


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Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.Department of Applied Economics IUniversidad Rey Juan CarlosMadridSpain
  2. 2.Department of Business and Social SciencesSt. Louis UniversityMadridSpain

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