dms wrote:It’s partly
dms wrote:
It's partly conjured up out of thin air, and partly money that the banks have borrowed from depositors, other banks and financial institutions. They do this because they have to meet their reserve requirement.
Not according to the European Central Bank you yourself cited earlier in this discussion. They say it is wholly backed by "private credit" (without a cubic centimetre of thin air):
European Central Bank wrote:
Commercial banks can also create so-called “inside” money, i.e. bank deposits – this happens every time they issue a new loan. (….). Inside money (….) is named this way because it is backed by private credit.https://www.ecb.europa.eu/explainers/tell-me-more/html/what_is_money.en.html