How do banks work?

How do banks REALLY work?

Banks take in money as deposits, give that money out as loans, and bam, that's it, that's how they work... right? Not quite...

There's a really simple way of describing how banks work. They take your money, lend it to other people and charge more interest than they give back to you. And that's how they make their money.

The thing is, that theory is kind of wrong.

 

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Your Money
…and who’s getting the bill for all this? Money is such a core part of the economy, and a lot of economic power lies in the hands of those who print it, earn it, and spend it. But money’s not just as a tool for exchange; it’s taken on a value in itself, and there’s a whole economy around money alone…
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