[This is a very short video, but this is fabulous. These seem to be Brits and they are interviewing a Professor. I was in banking on more than one occasion in my life. I actually did a LOT of work in home loans and the sale of property. When I listen to what that Professor is describing, he is nailing it. He is talking about the LAW, and how the LAW handles banking issues, and he is saying that there is a huge difference between what a Bank claims versus how the LAW treats the matter. For example, a bank says it takes deposits, but legally, it is really handled as a "loan from a customer". When I was a kid in Rhodesia, we had a type of bank known as a "Building Society". The related American concept is called a CREDIT UNION. Now a Building Society paid you a good interest on your deposits. And the idea was that it took that money and loaned it out for people who wanted to buy houses. I'm not fully sure whether, legally, it functioned that way. The professor says that in banking when you "borrow money" the reality is that the "money" is not transferred from anywhere. In fact, "the money" does not exist. "The money" is merely a book keeping/computer entry in your account. Therefore, the bank has just CREATED THAT MONEY OUT OF THIN AIR. Jan]
NB: NB: NB: IF ANYONE CAN GET ME THE NAME OF THIS PROFESSOR OR HIS WRITINGS OR CAN FIND THE FULL INTERVIEW FROM WHICH THIS SECTION COMES I WOULD BE MOST INTERESTED. THIS PROFESSOR TALKS ABOUT HAVING STUDIED THE 5000 YEAR HISTORY OF BANKING.
Below is what Wikipedia says about a Building Society, which is a British type of institution:
A building society is a financial institution owned by its members as a mutual organization. Building societies offer banking and related financial services, especially savings and mortgage lending. Building societies exist in the United Kingdom, Australia and New Zealand, and used to exist in Ireland and several Commonwealth countries. They are similar to credit unions in organisation, though few enforce a common bond. However, rather than promoting thrift and offering unsecured and business loans, the purpose of a building society is to provide home mortgages to members. Borrowers and depositors are society members, setting policy and appointing directors on a one-member, one-vote basis. Building societies often provide other retail banking services, such as current accounts, credit cards and personal loans. The term "building society" first arose in the 19th century in Great Britain from cooperative savings groups.