Quote from: o_e_l_e_o on July 26, 2019, 07:29:58 PM

The credit given to them is based entirely on how likely or otherwise the bank they are to repay that credit - i.e. a promise

I guess what you describe has more to do with a credit history of a particular borrower, so if you defaulted on a loan before, you are unlikely to be approved at all. If you have no credit history, be ready to provide some form of collateral. Either way, you are risking your future loans. That's not a mere promise in my eyes

Quote from: o_e_l_e_o on July 26, 2019, 07:29:58 PM

Quote from: deisik on July 26, 2019, 03:02:25 PM

Anyway, the loans you are talking about won't make a dent in the bank's balance if the borrower defaults on his debt, so my point still holds overall

That's not the point I'm making. Obviously the bank can absorb the loss of some loans; the point is that the money from these loans was created out of nothing without the bank increasing their assets or reserve at any time

That's not necessarily so

A bank may in fact have real depositors who brought their hard-earned cash to the bank. Then the loans in question can be given out of these deposits or covered by them. In this case, you can't possibly say that the money for such loans was created out of nothing