How Much Money Have Banks Created?

Banks have two key powers in today’s economy – they get to decide:

how much money to create, and
how this money can be spent.

1. How much money have banks created?

From the time when the Bank of England was formed in 1694, it took over 300 years for banks to create the first trillion pounds. It took only 8 years for banks to create the second trillion. Today cash accounts for just 3% of the total money in the economy (coloured green on the chart below). Money created by banks accounts for the other 97% (red on the chart below).



2. How have they used this new money?

Over the last 15 years the banks have used their power to create money to pump hundreds of billions of pounds into the property market (shown in red below). This has pushed the price of housing out of reach of ordinary people. Lending to the finance sector has also increased greatly over the past 15 years; this sector includes the companies that were involved in much of the speculation which contributed to the crisis.

Meanwhile, lending to businesses has stagnated, harming the real (non-financial economy) economy and lowering employment and growth.



http://www.positivemoney.org/how-money-works/how-much-money-have-banks-created/


I think how the financial sector works should be taught in schools and then people might just understand how much power they have, and hold them to account when they blatantly act illegally and against the public interest. We still have not prosecuted a single banker for what has gone on over the last few years, even though many other countries either have done, or are doing so.

BANKS don't "create" money, in the true sense of the word...
NEVER have, never will..

BASIC economic principles (as taught in 'Commerce' classes in junior high school..) teaches us that the actual 'intrinsic' value of money is created through the production, supply and trading of goods and services.

BANKS never "create" money ~ they simply borrow and re-lend other people's money, adding their own interest, usurious fees and hidden charges along the way, and creating 'credit', debts and even more misery along the way ~ AND paying their executives horrendous and undeserved mega-bonuses all the while..

GOVERNMENT never "creates" wealth or produces the intrinsic value underwriting a nation's currency, either ~ they basicly print (or buy from another country's mint..) the notes and coins that provide the daily means of exchange...