in modern banks money is just a number in a database, right? What stops the bank owners from just adding an amount to a saldo of an account?
In: Technology
Banks have a system of keeping track of all changes called a balance sheet. Any change that happens in the bank, has to show up on that balance sheet. If someone deposits money, it shows up on that sheet in accounts receivable, but for simplicity sake, we will say it’s incoming money. When it’s time to lend someone else money, they put it on on the outgoing side of the balance sheet. If money were to suddenly appear in someone’s account, the balance sheet would no longer be balanced as the person takes the money out of their account. If the money was never touched, technically it wouldn’t be a problem, but once more went out than was supposed to, it would show up quickly.
I don’t see anyone giving the right answer so here it is:
It’s a regulation called Basel (I think the latest is Basel III) – also local central bank regulations
Where the limit on how these things work with banks, how much money from their customer’s money can they lend, etc
bank accounts are liabilities to the bank. someone can change the amount but then the bank has to have the money to pay that out if they need money.
Latest Answers