The banks net worth increases when they loan money because they now have a private assest to the su of whatever money was borrowed, the banks created the public liability from nothing but when that is not paid back their networth drops by the same amount.
This is how we see the loses banks make but they are not really loses becuase the bank started with nothing and it still has nothing so no loss in reality.
@jscottupton
I agree.
ckpac 1 year ago
I think Byron Dale is confused.
jscottupton 1 year ago
The banks net worth increases when they loan money because they now have a private assest to the su of whatever money was borrowed, the banks created the public liability from nothing but when that is not paid back their networth drops by the same amount.
This is how we see the loses banks make but they are not really loses becuase the bank started with nothing and it still has nothing so no loss in reality.
Danster82 2 years ago