Banking and its effects on the money supply and asset bubbles: Part 5

Risk-weighting assets and the reflexive recency bias.

Dear Reader,

In Part 1 of this series we dissected what a bank does at its core.
In Part 2 we looked at how a fractional reserve banking system works.
In Part 3 we showed how this banking system increases the money supply.
In Part 4 an unbounded money supply was shown to reflexively drive asset bubbles.  

Today, in the final part of this series, we will disc…