“Due to fairly radical changes in the structure of the financial sector in recent decades, the importance of demand deposits has declined considerably and the role of commercial banks has changed dramatically. The main stream of monetary theory and practice continues to be directed mainly at demand deposits and commercial banks as purveyors of checking accounts. But checking deposits are simply one kind of liquid asset and banks are simply one kind of intermediary. Therefore, to single out checking deposits and commercial banks for special analytical treatment is mistaken. Effective control of the economy by the central banks requires control over all types of liquid assets and over the liabilities of all financial intermediaries.”

Discuss.