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(Deleting this, guess I'm wrong.)

• hacalox 9y ago
  I'm not an expert and I'm really willing to learn from others in case you know more. Could you please elaborate more in the matter? As far as I know, they give credits to people and they invest money to earn more money. That's how banks make money and become profitable. And for what I know they can even operate with more money than they really have. By the way government just guarantees a certain amount of money, in countries like Spain it's just 100K$/account. In other countries like Portugal I believe it's 30K$/account. EDIT: Responding to the government protection fact.
• drKarl 9y ago
  It sounds like you don't understand how banks operate. They only need to have reserves to back up customer deposits of a percentage, like 10% of total deposits, which means they very much do loan your money to other people and invest it too. And your deposits are protected by the government in case the bank fails only up to a maximum per account, which can be $100k