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The Building Blocks of the Banking System Are in Short Supply

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One consequence of the financial crisis is that economists have stopped talking about cash and money in the bank and begun talking about “safe assets” instead. Everybody understands the usefulness of cash. Most know about the convenience and relatively few limitations of money in the bank. But safe assets require some explanation.  The term has come into use only in the decade since the crisis. With a view to explaining the logic behind the phrase, Gary Gorton, of Yale University’s School of Management, has written a primer, The History and Economics of Safe Assets., available as a working paper on