Indeed, at our largest institutions, calculating Basel I ratios is sometimes viewed as nothing more than a compliance exercise. The development of sophisticated secondary markets in recent years has allowed banks to make strategic decisions to either retain or sell virtually every category of loan and investment asset. This market advance has had significant implications for the initial Basel effort.
Once the money has been created, it becomes part of the amorphous pool of the total money supply and, depending on the strength of the multiplier effect, is available to be used a number of times over, and for many purposes other than its first application.