Thanks ALB for the detailed

Thanks ALB for the detailed answer. I think where you and Positive Money part company is they say the debt itself is an asset and does not need to be matched with a deposit or through borrowing money unless the lender defaults. For example,  in their description of the banking crisis they say the banks only ran into trouble when it became clear loans would not be repayed. This meant they had a deficit on their balance sheet which had to be matched through borrowing money which they werenot able to do.As I understand your argument, you're saying the bank has to ensure it has the money to cover a loan the moment it leaves the bank. That's where the difference is, I think.