Illya Gerasymchuk
Entrepreneur / Engineer
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