Monetary System

The Monetary System offers a clear understanding of how the world financial system works and addresses a number of key issues facing today's society. Because of increased life expectancy and longer retirement periods the new social pattern we live in requires the development of new money policies by governments. This book outlines the conceptual basis required to build a new and more stable financial system, paving the way for new fiscal policy. Jean-François Serval and Jean-Pascal Tranié provide an in-depth analysis of the definition of money and show how money operates both in a historical context and within complex modern day transactions. The authors take a courageous and controversial stance in presenting the contemporary implementation of money as a social contract, governed by laws and regulations set by our culture. Serval and Tranié present an analytic approach that distinguishes those financial instruments that are freely transferable and those that can be classified as securitization and CDS. This book suggests a new model that aggregates the M5 category encompassing all financial instruments including cash from the Central Bank. In essence, all receivables that are in counterparty relationships are recorded as debts on balance sheets, the M6 entry being the total of balance sheets from where the data has to be collected to compare them with revenues. By employing derivatives of M5 and M6, the book covers all underlying collateral classes, thus allowing a type of comprehensive economic modelling that is innovative in its approach. Additionally, Serval and Tranié reveal the social role of monetary contracts not only because they are grounding exchanges as it has always been in the past but because it is a sampling tool for redistribution between actors including "sectors" through taxation, inflation, and deflation and finally between generations. The Monetary System offers bankers and anyone else concerned with today's global economic condition an understanding of the key distinguishing factors that can help shape a financially stable future.