Bank balance sheet expansion Additional demand for financial instruments impacting k Medium (leverage amplifies effect
but leakage to real economy)
Real economy investment in financial instruments Additional spending power not all consumed Weak (no leverage effect)
Intra bank lending and investment Balance sheet expansion creates additional demand for
financial instruments impacting k. Spending power
created is within the banking system and not in the real
economy
Strong (additional spending
power created within financial
sector and subject to leverage)