The Bank of England proved this statement right.
🤩 In 2014, the Bank of England officially published a document that shattered a common misconception about banks: they don't take money from clients' savings, but create it when they issue a loan.
Approximately 97% of UK money is held as electronic bank deposits (created through commercial lending) rather than physical cash.
In the UK, the central bank has no formal reserve requirements. In the US, reserve requirements were reduced to zero in March 2020 as a COVID-19 emergency measure.
And there are a lot of things that stop banks from continuing to print more money: the central bank interest rate, bank capital requirements, the availability of profitable lending opportunities, and the broader monetary policy framework.
Read our latest article on Medium to learn more 🤩
https://medium.com/@8lends/banks-print-money-out-of-thin-air-heres-the-proof-from-a-bank-of-england-report-d0f6ad1da195
