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
www.toobigtotell.eu
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”.

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