> You mean it happens when a bank borrows money from a central bank, right? No I mean in the moment the bank grants a loan. The money the borrower receives is

> You mean it happens when a bank borrows money from a central bank, right? No I mean in the moment the bank grants a loan. The money the borrower receives is new money, its not taken from anywhere else. But at the same time the bank records the credit as an asset which makes it a balance sheet extension. > when you put money on your bank account, the bank's balance sheet grows That's true, you hand over cash to the bank which becomes its asset and your account balance is marked up for the same amount. Not all money in circulation is accounted on a bank balance sheet, but most of it is bank deposits. cash is an exception, it's public money, not private bank money. When you "put money in a bank account", i.e. you bring cash to the bank you are essentially selling your public government money to the bank and it pays you with its own private bank money (which it "creates" as well). But this is only a micro-view of a single event. In the aggregate money is created when either the government runs a deficit or when banks make loans and money is destroyed when taxes are paid or loans are repaid.