Steve Keen wrote:Banks don’t
Steve Keen wrote:
Banks don't on-lend deposits they take in from depositors. Banks create money — and debt — whenever they extend credit to a client, whether it's by means of credit cards, mortgages, or business loans.
How many times do we have to repeat that banks don't lend only from what has been deposited with them but also from what they themselves borrow from the money market? The Bank of England papers state this clearly enough. Of course if you define a bank loan as money then by definition banks "create money" when they make a loan, but this leaves open the question of where they get the funds to make loans. Keen knows perfectly well that they don't simply conjure them up out of thin air. So do all practical bankers.