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Banks Do Not Create Money Out of Thin Air (VoxEU, 5 mins) It’s a widely held view that banks create money at will, but this article asserts that money creation stems from the assets of both parties in a transaction. For example, when using a credit card, the assets stem from the individual using the bank card, which are the individual’s future payments. The private bank in return must hold healthy assets and the local currency reserves issued by the central bank in order to be trusted. If there are doubts about either of these things, it will lead to a run on the banks. [Bullish banking sector]