When you transfer money from one bank to another, are they just moving virtual bits around? Is anything backing those transfers? What prevents banks from just fudging the bits and “creating” money?

Question

When you transfer money from one bank to another, are they just moving virtual bits around? Is anything backing those transfers? What prevents banks from just fudging the bits and “creating” money?

In: 1559

Answer 1

And technically they can just create it, but it gets corrected, unless it’s called Quantitative Easening. Bankese for “making money”

My account was credited $1100 when it should have only been $110 from a check j cashed. This was corrected within 48 hours but for that small time, it was in my account.