Thursday, 14 August 2014 12:53

A Conversation with a Loans Officer

Written by Wallace Klinck
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A Conversation with a Loans Officer

Some time ago, I had the following conversation with a loans officer from a major Canadian bank:

Wally: When you issue these loans to borrowers you create the money out of nothing, don't you?

Banker: (with slight hesitation) Yes, that is true.

 

Wally: You do not actually take the money from anyone’s account?

Banker: No, we don’t.

 

Wally: And you say that you own the credit that you issue--correct?

Banker: Yes that is correct.

 

Wally: You must because you want it paid back.

Banker: Yes.

 

Wally: And you want interest paid on the outstanding principal--another claim of ownership. Right?

Banker: Yes, that is correct.

 

Wally: And furthermore, if we should ……………

Banker: (anticipating my next words) Yes, if you default on your loan we will foreclose on your assets.

 

Wally: Did you create those assets?

Banker: (perceptively at unease) No, we did not.

 

Wally: Do you return these foreclosed assets to the Community?

Banker: (visibly troubled and hesitating as having encountered a disturbing denouement) No, we do not.


On a subsequent encounter this same person asked me with obvious concern: “What can we to do about it?"

Last modified on Saturday, 10 February 2018 18:00
Published in The Bank Creation of Money Out of Nothing
More in this category: Yes, Virginia, the Banks Really Do Create Money Out of Nothing »

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