3 ms·
You misunderstand. Lending is what makes a bank. When a bank (in the US) lends, it is creating new money that didn’t exist before due to fractional reserve requ
by pram 5y ago
You misunderstand. Lending is what makes a bank. When a bank (in the US) lends, it is creating new money that didn’t exist before due to fractional reserve requirements.
If you made a loan you’d effectively have a 100% reserve requirement to do so, while a bank currently needs 0% backing in deposits. You cannot make new money.
- cm2187 5y agoI don't misunderstand and given my profession I should know. Loans are not a regulated activity. You can make loans. Any corporation can make loans. Taking deposits is what requires a banking license.