The CFA system’s credit repression causes savings scarcity, not the reverse

Evidence

Thus, a monetary system that represses internal credit, such as the CFA system, reflects a lack of confidence in the ability of economic agents to make productive use of bank loans: etymologically, the word ‘credit’ comes from the Latin ‘credere’, which means ‘to trust’ or ‘to believe’. In this context, the paucity of bank loans is not the result of a lack of national savings. Quite the opposite: since loans create deposits, it is the paucity of loans that causes the scarcity of savings! — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 140

Categorization

• DEFINE: Ties the etymology of ‘credit’ (credere, to trust) to the argument that the system encodes distrust of African borrowers.
• XREF: connects to: Banks create money out of thin air when granting loans rather than lending savings; Scarcity of savings stems from scarcity of loans, not vice versa; The CFA franc structurally denied credit to economic actors outside colonial accumulation (+7 more)

Related

• Scarce CFA credit causes savings scarcity, not the reverse. (similarity 0.96)
• Scarcity of savings stems from scarcity of loans, not vice versa (similarity 0.93)
• The CFA franc structurally denied credit to economic actors outside colonial accumulation (similarity 0.93)
• Banks create money out of thin air when granting loans rather than lending savings (similarity 0.91)
• The CFA central banks subordinate domestic credit to defending the euro parity. (similarity 0.86)
• Banks create money ex nihilo, so credit not savings finances investment (similarity 0.84)
• The CFA franc was a political choice that deprived non-adapting African actors of credit (similarity 0.84)
• The CFA franc was a colonial instrument depriving African actors of credit. (similarity 0.84)
• Franc-zone banks hold idle liquidity instead of lending to the economy. (similarity 0.82)
• The CFA system blocks African countries from financing their own agricultural development (similarity 0.82)
• Franc-zone bank credit allocation suppressed African firms competing with French companies (similarity 0.82)
• Franc-zone central banks must restrict domestic credit to defend the fixed euro parity (similarity 0.81)
• The French guarantee of the CFA franc was illusory since African reserves exceeded debts (similarity 0.80)
• The CFA franc’s real purpose was draining colonial wealth to France. (similarity 0.79)
• The CFA franc’s parity was set without regard for local economic realities (similarity 0.79)

Broader Connections

• The CFA central banks subordinate domestic credit to defending the euro parity. #expands (0.75) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 308
• Franc-zone bank credit allocation suppressed African firms competing with French companies #exemplifies (0.60) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 128