Understanding How Banks Operate: Money & Debt

11 mins 1 yr

Understanding how banks work is an eye opener for most people. Did you know that up until 1844 in Britain banks in the UK printed their own paper cash money – these were called bank notes, of course. Banks still today make their own money. Every time someone borrows money from a bank the bank extends credit by creating money in that person’s account by pushing a button. No physical money is actually created. The debt creates that money and when the loan is paid back that money ceases to exist. The banks pockets the interest charged on the loan and erases the debt. That digitally created money disappears from the system. Understanding how banks operate: Money and debt.

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