Money, Banks and Loans

Where does money come from ?

The answer:
Less than 10% is cash, which is printed by National or Central banks.
More than 90%most of our money is “digital money” in the form of numbers on bank accounts. This money is created when somebody takes a loan.

Yes, that is really true.

The Banker in Happy Nation works in the same way: The money for a loan comes not from the Banker, but is taken from the supply. When paying back a loan this money goes back to the supply, it disapears again. Only the interest is going to the banker.

The Bank of England states it very clearly on their webpage:
“Most of the money in the economy is created by banks when they provide loans.”

The European Central Bank is also providing this info:
“How is money created?
Commercial banks can also create so-called “inside” money, i.e. bank deposits – this happens every time they issue a new loan.”

If you want to know more and get it explained in a video with graphics, then try this page:
The Banking 101 video course from