• crashfrog@lemm.ee
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    11 months ago

    Right but that’s a lot different than the loan being discussed here, which is when the bank capitalizes its own loans via deposits.

    • chicken@lemmy.dbzer0.com
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      11 months ago

      That’s an assumption about what I meant, but the fact is both create money. Banks loan out new money, which must only be matched by deposits equal to a small percentage of their outstanding loans specified by the reserve requirement. Which not too long ago IIRC was temporarily removed entirely.