Money & Macro Talks Should private banks create most of our money? ft. Thomas Bollen
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Nov 21, 2025 Thomas Bollen, an investigative financial journalist and author, dives deep into the mechanics of money creation and the need for monetary reform. He reveals how private banks create money and the impact this has on housing and the economy. Bollen discusses the risks linked to private equity and stablecoins, warning about the potential for systemic issues. He advocates for separating safe banking from risky investments and explores innovative solutions like Central Bank Digital Currency (CBDC) while emphasizing the need for reform in the face of strong banking lobby influences.
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Banks Create Money As Debt
- Private banks create most money by recording loans as deposits, so money is created as debt.
- This process balances assets and liabilities but is often misunderstood by the public and banks themselves.
Money Creation Shapes Economic Winners
- Where new money flows determines which sectors grow, so credit allocation shapes the economy.
- Banks favour housing because it's profitable and collateralised, inflating house prices and inequality.
Public Backstops Fuel Bank Risk Taking
- Private money creation creates systemic risk because public guarantees act as a safety net for private banks.
- That mix of private profit and public backstop increases moral hazard and taxpayer exposure.
