Money & Banking Analytical Framework 3: Deposit Money Banks

Deposit money banks (DMB) comprise commercial banks and other banks/financial institutions that accept transferable deposits, such as demand deposits. Consolidated data for the deposit money banks’ measures the creation of deposit money.

Analytical balance sheet of deposit money banks

Foreign assets is the DMB’ financial claims on nonresidents. Foreign assets comprise gold and other precious metals, claims on nonresident banks (e.g., shares in nonresident banks, foreign currency), as well as claims on other non-residents (e.g., claims on foreign government in the form of treasury bills, and loans).

DMB’ Reserves comprise holdings of currency and deposits with, and other claims (e.g., securities) on, the monetary authorities. Part of the DMB’ reserves with the central bank are mandatory.

Domestic credit consists on claims on government and other domestic sectors – non-financial public enterprises, non-monetary financial institutions, private businesses, households, and nonprofit institutions. These claims on domestic sectors include bills, loans and advances, credits, and deposits with non-monetary financial institutions.

Deposits comprise demand, time and savings deposits, foreign currency deposits, as well as liabilities to monetary authorities (MA). Domestic sectors as well as nonresidents can hold these deposits.

Other items, net comprises other unclassified balance sheet items. Included is also any statistical discrepancy. Other items, net may be regarded as a measure of net worth of the DMB, however, this is not entirely correct.