Too big to tell “How does the creation of money work?”

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Too big to tell "How does the creation of money work?"

Peter Konle
Member of the executive board of Sparda Bank Munich eG department corporate management

Documentary, 94 min
director: Johanna Tschautscher

translation note: The english term “to take out a loan” suggests that somebody loans money from somebody else. In reality, e.g., banks create money whenever they credit a customer account. This new money is a credit, granted by the customer to the bank. This makes deposits a kind of bank debenture, a ‘liability’ from the bank to the person. So both sides, the customer and the bank, are granting credits to each other when a customer “takes out a loan” from the bank. “Real money” produced by a central bank, has rarely been given out. The german term “einen Kredit aufnehmen” fits better. In a free translation this would mean: “to take out a credit”.