In "The General Theory of Employment, Interest and Money", pg. 81 (New York: Harcourt, Brace and Co.):: John Maynard Keynes' magnum opus, gives the impression that a commercial bank is an intermediary type of financial institution (non-bank), serving to join the saver with the borrower when he states that it is an;
“optical illusion” to assume that “a depositor and his bank can somehow contrive between them to perform an operation by which savings can disappear into the banking system so that they are lost to investment, or, contrariwise, that the banking system can make it possible for investment to occur, to which no savings corresponds.”
In almost every instance in which Keynes wrote the term "bank" in the General Theory, it is necessary to substitute the term non-bank in order to make his statement correct.
This is the source of the pervasive error that characterizes the sui generis Keynesian economics (that there's no difference between money and liquid assets), viz., the Gurley-Shaw thesis, the elimination of Reg. Q ceilings, the DIDMCA of March 31st, 1980, the Garn-St. Germain Depository Institutions Act of 1982, the Financial Services Regulatory Relief Act of 2006, the Emergency Economic Stabilization Act of 2008, sec. 128. “acceleration of the effective date for payment of interest on reserves”, etc.
"The 2006 Financial Services Regulatory Relief Act gives the Fed permission to pay interest on reserves (IOR). The current IOR rate 0.5% would be higher than "the general level of short-term interest rates" which is imposed in the Law. George Selgin at the Cato Institute brought up the issue:
"[T] Fed couldn't raise its rates without breaking the law…Instead of paying banks more to hoard reserves, [the Fed] can tighten money…by selling off some of its trillion dollars in assets…Whether events will warrant tightening before the year is out is anybody's guess. But if the Fed chooses to tighten, it should at least do it legally." ("A Legal Barrier to Higher Interest Rates," The Wall Street Journal, Sept. 28, p. A13. Italics are mine.)"