"a bank creates money when it" course hero

by Miss Esperanza Watsica 8 min read

Can banks give everyone their money?

Banks wouldn’t be able to give everyone their money, and unless the government stepped in the bank would almost certainly collapse and people would lose their money. (If you think that story sounds familiar, it’s because it’s what happened during the 2008 financial crisis.)

Is money a part of the economy?

Money is such a core part of the economy, and a lot of economic power lies in the hands of those who print it, earn it, and spend it. But money’s not just as a tool for exchange; it’s taken on a value in itself, and there’s a whole economy around money alone…. Return to ‘Your Money’.

Do banks hold your money?

Banks hold your cash for you, in the form of deposits. But banks don’t just look after money. They also give it out, in the form of loans (including mortgages). And these loans are how most new money is made.