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Thanks for the comment and link! I have been thinking about this the wrong way around for a long time.

• stephen_g 8y ago
  No problem, I expect most people don't know this. Don't worry though - even some economics textbooks contain those kind of loanable-funds / money multiplier models that don't really describe the real-world workings of banks! I guess it's a holdover from classical economic theory - banks did work more like that a century ago when that kind of economics was being worked out (pre-WWI gold-standard days) but the modern economy is different!