4 good questions and answers about "the meaning of money - what banks do"
it uses liquid assets on the form of bank deposits to finance the illiquid investments of borrowers.
because it doesn't keep all the funds deposited with it in the form of highly liquid assets , but lends out that money so there is more currency in circulation, in the form of loans and mortgages
this can only happen if there is not bank runs
- A T-account
- it is used to analyze a banks financial position, and summarizes its financial position by showing, in a single table, the business's assets on the left, and liabilities, equity on the right.
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