Banks & Central BanksMoney Creation
Banks Just Lend Out Savings
When a bank makes a loan, it creates new money
You were told banks lend out the money savers bring in. The Bank of England says it mostly works the other way around.
You'll find out
- Where new money really comes from
- What happens when a loan is repaid
- What stops banks making endless money
Why it matters
Most of the money you use was typed into existence by a bank. Seeing how changes what money is.
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