Another view - are the banks just intermediaries?

A new article in Paul Krugman's "The Opinion Pages" in The New York Times represents an interesting view on the banks and their role in the financial system. The question actually appeared in context of another discussion (there are links to previous posts on Paul Krugman's page), but this particular problem is interesting of itself.  In a few words, Krugman states that while banks can certainly be dangerous due to the tendency to accumulate risks, they do not increase consumption and demand for money by themselves. Rather, they are just intermediaries between lenders and borrowers.

Personally, I can't agree with this assertion, as I think that modern banks can influence demand, especially if they want it to be increased, but I still find this point of view quite unconventional and definitely worth consideration.

Here is the link:   Banking Mysticism