This link shows some notable
This link shows some notable people who think that banks create money. http://www.positivemoney.org/how-money-works/proof-that-banks-create-money/ I am less concerned that loans come before deposits, or the other way around, more that private banks have the ability to create money and debt through the act of lending. The money supply tripled in 10 years in the UK from 1997, mainly through banks increasing lending, and one third of this new money went on commercial and private property. Bank were able to lend more in this period because the reserve requirement was very low, interest rates were too low for too long, and banks were going out of their way to lend more, much of it to unsuitable borrowers including my friend on benefits. The expansion of the money supply must have been caused by lending increasing first, and if it increased at a rate of 10% a year for 10 years, this would enable the money supply to triple in that period. The banks increased their lending, and in doing so they could seek extra reserves as well, because more money had been created. This is explained in the book "Where does money come from ?" by the New economics Foundation.All new money should be created by the central bank, free from debt and interest, and free from political influence, to be spent into the economy. The present system is manic depressive, more lending encouraging a boom, a bust occurring when banks lend less and people try to pay down debt because there is less money.M0 is a very small part of the money supply, M4 is much the biggest component.