Banks (in the US) don't loan out deposits; deposits are the cheapest source of reserves used for settlement, but the actual loans themselves are created ex nihi

Banks (in the US) don't loan out deposits; deposits are the cheapest source of reserves used for settlement, but the actual loans themselves are created ex nihilo [1]. This is kind of the central point of why we no longer experience bank runs in the broader economy, and why Bitcoin will always be vulnerable to them. [1] http://www.standardandpoors.com/spf/upload/Ratings_US/Repeat_After_Me_8_14_13.pdf http://www.standardandpoors.com/spf/upload/Ratings_US/Repeat...