If banks lend out our money and typically only keep 10%, how does the money enter the banking system again?

Question

For example, when we buy things at a store say Wal-Mart, do they have a bank account themselves at an institution? Where does the money of our debit or cash transactions post to? I know cash gets picked up by an armored truck, but to where? Thanks in advance for assisting my curiosity!

In: Economics

Answer 1

Banks don’t really lend the money of other people anymore.

They borrow from the central bank and lend that out, instead.