«Second, is to encourage higher private savings as a source
of loanable funds to support domestic credit and capital market, and expand financial inclusion.
As this represents a free market «equilibrium», there is no distortion in the allocation
of loanable funds.
Banks are not intermediaries
of loanable funds — and why this matters.
And neither is it a question of the lack
of loanable funds.
Not exact matches
But now, perhaps, we'll be seeing the first sign
of demand for
loanable funds.
But imagine a scenario where the demand for
loanable funds leaves interest rates near zero, but the times are insecure and violent, leaving you uncertain that if you stored your cash privately, you would run too large
of a risk
of having it stolen.