Salim Kara stole $2M in coins with a magnet and a car antenna

Re:Salim Kara stole $2M in coins with a magnet and a car ant... by rileymat2 on Tuesday January 02, 2024 @09:03AM (#38841656)

The part that is missing is that when you take that money to buy the thing intended with the loan the bank has to give you that money unless it is going to a customer of the same bank; impacting the fractional reserve requirement.

As a thought experiment, if you started a bank from 0, how do you pay out the first loan?

Yes, they create money, but deposits are a requirement to do it. (Unless you are doing some interest rate arbitrage by getting a loan from another source)

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Re:Salim Kara stole $2M in coins with a magnet and a car ant... by benlivengood on Tuesday January 02, 2024 @11:56AM (#38843794)

I think a primary benefit of a bank is the ability to borrow directly from the Federal Reserve or similar central government bank. The spread on interest rates between the central bank and consumer rates is revenue.

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Re:Salim Kara stole $2M in coins with a magnet and a car ant... by reese_john on Tuesday January 02, 2024 @10:34AM (#38842646)

> Yes, they create money, but deposits are a requirement to do it.

Deposits, although an important source of funding are not a requirement, capital is. There are capital requirements that make starting and running a bank a fairly expensive enterprise - you need to put up a lot of your own money (equity) for use.

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