Banks cannot lend their depositors’ funds

Banks cannot lend their depositors’ funds

Introduction I keep getting comments from people who claim that my suggestion that banks do not use funds deposited with them to make loans is wrong. They are adamant that this claim is wrong. They are usually quite rude about it, and when presenting their arguments, they claim that their argument must be right because banks pay interest on deposits, and if banks did not make money from those deposits by lending them out, they would not do so. Q…