Keep in mind that there's a theory where bank loans are actually a way to create money that doesn't exist nor has any collateral.
The "reserve multiplier" theory of money creation is incompatible with modern bank regulation, or even the meaning of the terms used (banks only lend reserves to each other, never to customers), nor does it describe how money creation works in real economies (despite the fact that it appears in wikipedia).
For a good overview of how money creation works, see this BoE report:
sorry, but fractional reserve banking is no longer used in modern banking. It was done away with several years ago. Here's a little explainer for you: https://www.youtube.com/watch?v=cDNSNX48Kmo
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The "reserve multiplier" theory of money creation is incompatible with modern bank regulation, or even the meaning of the terms used (banks only lend reserves to each other, never to customers), nor does it describe how money creation works in real economies (despite the fact that it appears in wikipedia).
For a good overview of how money creation works, see this BoE report:
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
No, not really. The only requirement for the "banks create money through loans" theory is that banks practice fractional reserve banking.
https://en.wikipedia.org/wiki/Fractional-reserve_banking
sorry, but fractional reserve banking is no longer used in modern banking. It was done away with several years ago. Here's a little explainer for you: https://www.youtube.com/watch?v=cDNSNX48Kmo