This is the same description
This is the same description of how banks work as in the articles in the Bank of England's Quarterly Review for the first quarter of 2014 mentioned in message #139:http://www.worldsocialism.org/spgb/forum/general-discussion/100-reserve-banking?page=13#comment-12263Positive Money and other currency and banking reforms (they don't like being called cranks) think this backs up their view of how banking works, but it doesn't. It confirms that banks don't and can't "create money from thin air". As the article you quote says, of banks
Quote:
In addition to helping manage this payments system they issue money in the form of loans. Banks earn a profit in the means of transacting business when their assets are less expensive than their liabilities. In other words, banks need to source their ability to run this payments system smoothly, but will seek to do so in a manner that doesn’t reduce their profitability.
Profitability, that's what places a limit on what they can lend.