Modern commercial banks can create deposit money when they extend loans, subject to funding, capital, liquidity and regulatory constraints. This is the banking fact that surprises the most people.
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The balance-sheet entry is the easy part; keeping payments flowing is harder. A new bank loan commonly appears with a corresponding deposit on balance sheets, but borrowers may spend funds into other banks.
The simple picture of banks mechanically lending a fixed pile of prior customer deposits misses important balance-sheet dynamics. The piggy-bank picture of lending doesn't explain modern deposit creation.
Deposit creation is not a license to lend without limit; capital, payment obligations and credit risk matter. Creating deposits is not creating unlimited purchasing power without consequences.
Which bank constraint would you watch first?