The Monetary System

Conclusion

Figure 5.4 shows what the monetary system looks like regarding the use of contracts to exchange compared with the realities of modern exchanges and goals. We have set out all the categories of actors, households and not-for-profit organizations, enterprises and administrations. As a counterpart to these exchange relationships, the enterprises – including both those producing tangible goods and service providers – are shown. These are what the literature calls the market participants, which does not mean very much before it is referred to intermediaries conducting numerous transactions within various marketplaces.

We have explained that their capacity to connect and exchange was established by their mutual reconnaissance, usually materialized by an ID number, and for exchanges a bank account number and a client number with a monetary institution. As soon as any actor is so recognized, they can exchange. Our drawing shows how flows are organized to go to the platform of payment services. This drawing is of key importance to show how the lines have changed over recent years, banks just being reduced to a specific category of enterprises since they have lost their monopoly for payments and now are reduced to receive deposits from actors which are a limited minority share volume of the economic refinancing. Their role is slowly being reduced to that of specialized commissioned intermediaries, and as such is developing in a competitive environment with other actors, even ...