the bank has the legal right to increase the money supply AKA 'print money'
Illya Gerasymchuk
the bank has the legal right to increase the money supply AKA 'print money'
so to give you a $100 loan the bank can just create those $100 and give give them to you
pretty neat arrangement, huh? 😁
banks are credit institutions which means they can create broad money
while a non-credit institution or a regular business can issue loans - they must fund it (e.g. raise money, use excess profits)
they can't just create those $100, thus expanding the monetary supply