Illya Gerasymchuk
Entrepreneur / Engineer
when banks buy assets from other banks - new deposits do not get created, as the payment happens by moving funds between the commercial bank's reserve accounts at the central bank thus, it's base money movements/reallocation, not creation
let's say the bank bought a T-bill from you for $1000. for this, they "created $1000" and deposited them into your account. bank’s balance sheet: ➖ Assets: +$1000 (the T-bill) ➖ Liabilities: +$1000 (the deposit/payment to you) the key here is that you are a NON-bank