David Graeber from the Guardian writes that: When banks make loans, they create money. This is because money is really just an IOU. And that the paper: ...co

David Graeber from the Guardian writes that: When banks make loans, they create money. This is because money is really just an IOU. And that the paper: ...co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong. The truth is out: money is just an IOU, and the banks are rolling in it http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity http://www.theguardian.com/commentisfree/2014/mar/18/truth-m... The Bank of England Paper: Money creation in the modern economy http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf http://www.bankofengland.co.uk/publications/Documents/quarte... Edit: added more text to second quote.