Money is first and foremost created when someone gets a loan. The bulk of money represents banks’ debts to the public. When a bank grants a loan, both its assets and liabilities increase. The lending bank asks the customer to sign a promissory note and adds the resulting receivable to its assets. However, the loan is withdrawn only when the customer's account is credited with the equivalent amount, so that the bank's debts also increase.
As the amount of debts increases, so does the amount of money. The customer becomes aware of an increase in his account balance and notices that he has more money than a moment earlier. When the loan is repaid, the customer must arrange for the required sum to be available in the account. At repayment of the loan, both the bank’s debts and receivables are wiped off the bank's accounts. In practice, the amount of bank debt deducted from the customer's account is slightly more than the sum originally borrowed, as the bank collects interest on the loan and makes some other charges
