They are loans. Money is given to the banks, and then repaid (with interest, but a low rate and short time makes this marginal). The fact that the money is "cr

They are loans. Money is given to the banks, and then repaid (with interest, but a low rate and short time makes this marginal). The fact that the money is "created" and "destroyed" is the nature of the Fed. They don't need to have money in order to lend it. That's what the Fed is. These loans are literally the same as printing money, loaning it, collecting the loans, and destroying the printed money. Except everything is just numbers on a balance sheet, so no physical money needs to be physically printed or shredded. The effect is still the same: The Fed decides that money should enter the money system, and also describes how that money will leave the money system.