Fractional-reserve banking

Policy#9 - The Bank's Inky Little Secret: Why is the bank's pen mightier than yours?

Policy#9 - The Bank's Inky Little Secret: Why is the bank's pen mightier than yours?

Most money is actually created by the banks. They only need to get a fraction (i.e “fractional reserve banking”) of it from the central bank and the rest of the money is created when the bank lends to businesses and individuals. Why do Capitalist societies give the banks this much power? Partly because the citizenry is so distracted, but also due to the fact (as the OWS protesters found out) there can be a heavy price to pay for questioning the system.