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>>And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of tha
by onetimemanytime 8y ago
>>And what's the significance of that? Suppose I had $100 in a bank in UK and I moved it to a bank in Germany. Neither country is better or worse because of that. The article doesn't bother to explain the ramifications.
Ummm...the German bank can loan or invest about $85-$90 of that. The British bank has to loan about the same amount less. When you talking trillions it ads up. Generally you want banks with a lot of deposits.
- spiralx 8y agoBanks don't lend out deposits, they lend based on the expectation of getting repaid. Lending is just an adjustment in the borrower's assets and the creation of an equivalent debt, which is why banks are said to "create money".