> Banks are required to have a certain amount of capital in reserve to make loans Not if these loans are secured then they can make as much money as they want

> Banks are required to have a certain amount of capital in reserve to make loans Not if these loans are secured then they can make as much money as they want from thin air. > Deposits from consumers give the banks the reserve capital they need to make those loans. No. At least in the US, they just need to secure the loan with an asset that can be held from the dealers. Most of the time, if you got your mortgage from a bank, they'll just liquidate for real cash. > Without a way to use the deposits to make money the banks would just as soon not have your money. Which is why, in this new system, banks have become hostile to customers. Banks are no longer in the business of helping customers but trading money market funds.