"I tell Turner that my shock stemmed from a conversation I had some 3 years ago with a very senior official at the Bank of England, proposing this alternate view of credit creation. I was listened to with bemusement. I had got it wrong, I was told, politely but with a slight look of incredulity. A major central banker did not know this three years ago but this is far from an anomalous example, Turner says: “I was told by a very, very senior economist – I won’t tell you whom – in a global organisation, not long ago. We had lunch together and I had given him a copy of a recent lecture I’d done and he said in advance, “just to spice up our lunchtime discussion, I do not believe that banks create money, I think they intermediate money that already exists”. And I tried to persuade him that he was wrong”.
Despite the revolutionary implications for our economic understanding, the news has not spread to that shortcut for common knowledge, the man on the Clapham omnibus"