Like what drops them from just adding some extra 00 as everything is digital, especially in third World countries?
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Modern bank accounts these days for most immediate purposes are in fact essentially just numbers in a very fancy database that, *in theory*, could have arbitrary amounts added to them at any time.
But the real, actual, physical money and/or other things of value (let’s just call them all “assets”) *are* there. They just can’t move as quickly because, well, they’re real, physical objects. And banks do actually settle up on those assets on a regular basis. Physical dollars or items of value are physically carried and exchanged from vault to vault. They just do it once in a while in bulk movements at predetermined times instead of constantly.
What the fancy database version of accounts allows banks to do is more or less “promise” transfers of these assets in advance of the actual assets moving from place to place. In much the same way that buying stuff with a credit card is you “promising” to pay a bill with some of your actual money, just not right away. That allows transactions to effectively happen *right now*, and let the physical transfer of assets to happen later when it’s more convenient to do so. In the meantime, the bank writes a “this transaction happened” note in a very big logbook of things they’ve done recently. Before they even do that, they also check the logbook to see whether the accounts in question would actually have the necessary assets in them after all the other logbook notes are applied as well, so no one can do things like double-spend money.
When it comes due for one of those asset transfers to happen, the bank will go through its logbook of transactions and figure out what the net movement of all the assets actually is. Extremely simplified example: if Bank A has to pay bank B $1,000, but then later Bank B paid Bank A back $500, then only $500 is going to move from Bank A to Bank B this time. Every bank is doing their own paperwork to make sure everything is correct, and assuming all the paper trails are accurate, everyone should agree on the same numbers. If they don’t, it’s audit time.
If you were a bank that falsified records, the next time you did this process, you would get numbers that don’t match up with anyone else’s. You would very quickly single yourself out as a bank that has falsified records, and you’ll be cast straight into very expensive legal trouble and penalty fines. For most small and regional banks there’s so few ways to hide the fraud, so the risk just isn’t worth it.
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