4 ms·
Banks don't lend out deposits though.
by spiralx 4y ago
Banks don't lend out deposits though.
- frankreyes 4y agoExcept that they do... That's how banks make money. With interest. They lend it as mortgage or as T-bills lending it to the government. Just look at the balance sheet of SVB
- spiralx 4y agoYou're talking about buying bonds as "lending to the government" which is a pretty odd way to describe it, but it still isn't the bank lending to clients, which creates new deposits and a matching loan asset. https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...