One argument frequently presented for regulation and control over bank chartering activity is that banks can create money and chartering too many might result in excessive money creation and inflation in the economy.

Question

Quizplus · Accepted Answer

This argument is true. Banks create money through the process of lending, and if too many banks are chartered and lend excessively, it can lead to an increase in the money supply and inflation. Regulation and control over bank chartering activity can help prevent this from happening.

One Argument Frequently Presented for Regulation and Control Over Bank