[eurasiantiger]

> Banks don’t get to create money

Literally every loan a bank gives out is mostly made up on the spot, everywhere in the world.

In some countries, banks are subject to reserve requirements — typically from fractions of a percent to some percents of their liabilities to depositors. Basically: banks need to cover the savings of people.

In the UK (and many other countries), this is not the case; banks are not required to have cash on hand in relation to their liabilities to depositors.

Instead, they are subject to capital requirements, which means they need to have sufficient equities (cash, securities, other financial instruments) with sufficient liquidity in relation to their risk-weighted assets (credit and loans). In effect: banks need to cover the investments of the investors.

[mkr-hn]

The term for the type with reserve requirements is fractional-reserve banking: https://en.wikipedia.org/wiki/Fractional-reserve_banking