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In the simple savings-and-loan case, banks loan from their deposits. So technically it is the bank's available capital, but the capital belongs to someone else
by samkater 5y ago
In the simple savings-and-loan case, banks loan from their deposits. So technically it is the bank's available capital, but the capital belongs to someone else. If the bank has $1 million in deposits, it might decide it can safely loan out $100k, which in some sense increases the money supply.
- orwin 5y agoNo. Or maybe in really rare cases. One man savings are really another man debt. In reality, actors that can roll their debt do so (so states and companies with enough capital as collateral), allowing common men to have savings.