> fundamentally the incorrect claim that banks lend out their depositors funds Typical arguments against this always end up in "they do lend out their deposito

> fundamentally the incorrect claim that banks lend out their depositors funds Typical arguments against this always end up in "they do lend out their depositors funds" with extra steps. deposits go to their balance sheets as assets and a liability towards the depositor. Banks do business with their assets and some of that business might put their balance sheet in a position where they can't or won't honor their debt to depositors. At that point whether they "lent out depositor's funds" is philosophical.