[KMag]

> Actually the money was just sat in a bank account, which AFAIK doesn't cause net carbon emissions.

That depends on your definitions. I'm not sure about U.K. reserve ratios, but in the U.S., about 90% of your bank deposit goes back out as loans that hopefully increase economic activity. The majority of that activity probably isn't carbon-neutral.

[okeuro49]

Neither the UK nor the US have a reserve requirement.

https://en.m.wikipedia.org/wiki/Reserve_requirement

In addition, banks in modern times have never had to wait for deposits to extend loans.

[KMag]

How did I miss the reserve requirement in the US going to zero in 2020? I was living overseas at the time, and I know I had more pressing things to consider, but still...

> In addition, banks in modern times have never had to wait for deposits to extend loans.

Are you referring to the discount window, the repo market, and interbank lending, or the fact that reserve requirements are typically averaged over a couple of weeks? In these cases, (as long as there's a reserve requirement), a person adding to a bank does still enable more lending, no? Or, are you saying that in modern times, even with non-zero reserve requirements, commercial banks usually operate with excess reserves, so reserves are not the limiting factor on lending?

[okeuro49]

This is what I read from the Bank of England:

> The reality of how money is created today differs from the description found in some economics textbooks

> Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

[tialaramex]

Specifically, in my case, that bank is (mostly) NS&I, one of several banks owned by the British government.

NS&I doesn't write loans, nor does it have a big vault full of cash somewhere, instead my money is "invested" in running the country I live in. Rather than borrowing money from international money markets by writing gilts (bonds payable by the government) they borrow my money and pay me interest.

As a result, nothing changes, all the same things were going to happen anyway, just they'd have borrowed from the Chinese, or the Americans or whoever was buying gilts.