So it's only true because the trend at the moment is money is created by central banks giving loans. Is a roundabout misleading statement from the parent comment
The bank takes your signed loan note as an asset and creates an advance against it on the liability side.
A deposit is just an advance with the ownership tag changed.
And that's how it has always been.
As Reginald McKenna, former Chancellor of the Exchequer and Chairman of the Midland Bank, said in 1928[0].
"I am afraid the ordinary citizen will not like to be told that the banks or the Bank of England can create or destroy money. We are in the habit of thinking of money as wealth, as indeed it is in the hands of the individual who owns it, wealth in the most liquid form, and we do not like to hear that some private institution can create it at pleasure. It conjures up a picture of an autocratic and irresponsible body which by some black art of its own contriving can increase or diminish wealth, and presumably make a great deal of profit in the process"
It's not the trend, it's how banks have always operated. There's no way within a double entry accounting system to create deposits without also creating the corresponding loan asset. If you know of a way to do so then all the politicians that obsess over the national debt would love to hear from you.
The bank takes your signed loan note as an asset and creates an advance against it on the liability side.
A deposit is just an advance with the ownership tag changed.
And that's how it has always been.
As Reginald McKenna, former Chancellor of the Exchequer and Chairman of the Midland Bank, said in 1928[0].
"I am afraid the ordinary citizen will not like to be told that the banks or the Bank of England can create or destroy money. We are in the habit of thinking of money as wealth, as indeed it is in the hands of the individual who owns it, wealth in the most liquid form, and we do not like to hear that some private institution can create it at pleasure. It conjures up a picture of an autocratic and irresponsible body which by some black art of its own contriving can increase or diminish wealth, and presumably make a great deal of profit in the process"
[0]: https://new-wayland.com/blog/post-war-banking-policy/