Where Do Banks Get the Money When They Give You a Loan?

From Danielle DiMartino Booth Quill Intelligence with Professor Richard Werner explaining: "Where Do Banks Get the Money When They Give You a Loan?" (in 5 minutes or less)


"Is it from deposits...or is it from excess reserves at the central bank...or is it just created out of nothing, out of thin air, invented?"


Short Version: They book the loan as an asset and create a customer claim on the bank (aka a bank deposit) into your account as liability.

Paul Mangione
Fort Schuyler Advisors
www.ftschuyler.com

Not exactly how Jimmy Stewart explained it in "It's a Wonderful Life".

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