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Under this theory, the bank only acts as a middleman collecting savings in the form of deposits lent out to willing borrowers. So eg if you wanted to borrow $1,000 to buy a new phone, you could go to a friend or a relative but there is the issue of trust, liquidity, and reliability of the transaction. Hence, most people go through a bank or financial intermediary.

The Biggest Lie About Money
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Marcus Tan

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Matt Lillywhite
Matt Lillywhite

Written by Matt Lillywhite

46K Followers
49 Following

Storyteller and part-time procrastinator. Writing to inspire, entertain, and avoid doing laundry. Substack: https://mattlillywhite.substack.com/subscribe

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