ECB VP Constâncio: deposits are much more liquid than credits

"A crucial rationale for bank regulation relates to the fact that when they concede credit, banks create money by creating a corresponding deposit. This activity that is at the centre or our credit-money system, involves a significant liquidity transformation as deposits are much more liquid than credits."
-  Vítor Constâncio, Vice-President of the ECB, at the Conference on “European Banking Industry: what’s next?”, organised by the University of Navarra, Madrid, 7 July 2016

Challenges for the European banking industry

Lecture by Vítor Constâncio, Vice-President of the ECB,
at the Conference on “European Banking Industry: what’s next?”, organised by the University of Navarra,
Madrid, 7 July 2016

https://www.ecb.europa.eu/press/key/date/2016/html/sp160707_1.en.html