Visiting Scholars Forum

Valerian Klein (doctoral researcher at the Max Plancke Institute for Legal History and Legal Theory in Frankfurg, Germany) presents a talk on his dissertation research: "The Legal Structure of Bank Money."

ABSTRACT
Modern monetary systems rely predominantly on bank money. What circulates as money in everyday economic life
is not cash issued by the state, but deposit balances held with commercial banks. From a legal perspective, however,
bank money is merely a private claim: the customer’s claim against a bank to pay out the positive account balance.
This raises a question that has received surprisingly little systematic legal analysis: how does law enable this
particular private claim to function as money, while other claims arising from private credit relations do not?

The project starts from the thesis that the monetary quality of bank money is not an inherent attribute of the claim
itself. It emerges from the interplay of legal rules and institutions governing monetary obligations, bank account
relationships, payment services, credit, banking regulation, and monetary law. It captures the resulting legal structure
in four interrelated categories:

1. Connectivity
2. Decontextualization and homogenization
3. Par value on demand
4. Safeguarding

These categories form a causal chain. The very mechanisms that make the claim a means of payment create the
vulnerabilities that must then be compensated: detachment from context deprives the holder of the information by
which he would otherwise assess a claim – unlike the bill of exchange, where each endorsement adds a liable party,
nothing can accumulate in circulation when nothing is transferred – and the promise of par on demand, combined
with the bank’s power to use the funds, generates default risk. Safeguarding is therefore not an appendix to the
structure, but its necessary counterpart. By reconstructing this, the project highlights the constitutive role of law in
modern money creation and contributes a legally grounded perspective to debates in law and political economy,
monetary theory, and the design of financial infrastructures.

The talk presents this framework, shows how the categories depend on one another, and puts it up for discussion.

BIO
Valerian Klein is a doctoral researcher at the Max Planck Institute for Legal History and Legal Theory in Frankfurt
am Main, where he is writing his dissertation on the legal structure of bank money under the supervision of Prof.
Marietta Auer. During the fall semester 2026 he is a Visiting Scholar at Columbia Law School, hosted by Prof.
Katharina Pistor. His research lies at the intersection of private law, banking regulation and monetary theory.