0
Credit is just like oxygen for banks.Banks loan out money to the person that needs the money and banks build interest off of the money they loan out.
When banks give out loans, they do not give out money that they already have. They simply give the loan which is a promise to pay the actual money which they never really have to do. In the economy, 95% of the money is in the form of bank credit. There is no real currency backing it.
Whenever we borrow money, the bank creates new money. This process constantly (almost) expands the money supply. This dilutes the value of the existing money. This is because total debt has to keep expanding in order for people to be able to pay back what they owe, otherwise there simply won't be enough money to earn to pay back what we owe. When that happens, we declare bankruptcy, there are foreclosures, unemployment and so on which causes the vicious cycle of deflation.
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
What is the importance of MIS in banking sectors?
What is the importance of MIS in banking sectors?"
What is banking and importance of banking?
In short: Banking finances commerce when cash is not sufficiently available. Bankers make credit available against gradually taking a share of the profits in the form of interest while recouping their investment.
Is a credit score of 679 a good score?
679 is consider good in processing industry not in banking Very low score and wont be getting credit for forseable future
Where did the banking industry start?
The banking industry started in h late middle ages, at fairs where money was exchanged
What does Credit Agricole do for its customers?
Credit Agricole do what they themselves call "Customer-Focused Banking", they offer retail banking, corporate and investment banking as well as specialised financial services.
In the banking industry what does loc mean?
Line of Credit
What is the importance of MIS in banking sectors?
What is the importance of MIS in banking sectors?"
What are some well known industries in Delaware?
Chemical industry (duPont and related companies), and banking/credit cards.
What is banking and importance of banking?
In short: Banking finances commerce when cash is not sufficiently available. Bankers make credit available against gradually taking a share of the profits in the form of interest while recouping their investment.
In what industry do Clearpath operate?
The banking industry. Clearpath is a credit union located in the Southern California cities of Laguna Hills (inside Ralph's), Glendale, and Moreno Valley.
What industry did the federal reserve act mainly affect-?
The Federal Reserve Act mainly affected the banking industry.
Is a credit score of 679 a good score?
679 is consider good in processing industry not in banking Very low score and wont be getting credit for forseable future
What industry does banking come under?
Banking falls under the financial industry. The Federal Reserve is the central banking system of the US. Each state has its own Department of Financial Institutions, which oversees the banking industry.
Is Barclaycard online banking for credit cards or traditional banking?
Barclaycard online banking is for both credit cards and online traditional banking. The Barclaycard Classic credit card gives you the extra flexibility you may need with your finances.
Where did the banking industry start?
The banking industry started in h late middle ages, at fairs where money was exchanged
How does the French government deal with the banking industry?
tendency to interfere with the banking industry if prospective acquisitions appeared to threaten jobs.
Importance of simbanking?
The importance of SimBanking is that you can do your banking using a mobile phone.
