How do private banks “create” money and is that okay?

Question

Edit: So basically we have two explanations. One goes by actual money loaned out again and again by different people and banks, thus “creating” money. The other one: Banks actually loan out money they dont have and never had by creating the same volume as asset.

In: 0

Answer 1

They don’t. Where are you getting the info that banks create money? Banks store money and invest it.