Topic Videos
How do commercial banks create credit?
- Level:
- A-Level, IB
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 21 Mar 2021
Old-fashioned textbooks are wrong! Banks create credit by extending loans to businesses and households – pure and simple! They do not necessarily need to first attract the savings deposits of customers. This short revision video looks at bank lending and some background data on commercial bank loans and overdrafts in the UK in recent years.
You might also like
Micro experiments - If it costs nothing, is it worth anything?
3rd February 2016
The Great Recession and the Failure of Financial Intermediation
2nd September 2016
Measuring Market Power - The Lerner Index
Study Notes
Sweden aims to be completely cashless by 2025
11th May 2018
Which UK bank makes the highest profits?
10th November 2022
Differences between banks and building societies
Study Notes