5 ms·
Banks 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
by spiralx 8y ago
Banks 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".