Comments by "Aden Wellsmith" (@adenwellsmith6908) on "Banks don’t loan out depositor’s money" video.

  1.  @sebgierek1462  The UK doesn't have fractional reserve banking.
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  2. In the UK, its not fractional reserve. Do you research first. The UK operates a risk based capital requirements regime The capital is invariably lent to the state and the state splashes that cash.
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  3. Do you really think they have a pile of cash of depositors money, not lent out.
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  4.  @evildrome  Do the accounting. Post the entries for the transactions involved.
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  5.  @stephfoxwell4620  So a Bank gets £100. Lends our £1,000 at 5%. There's your starter problem. You've got the mechanism wrong.
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  6.  @stephfoxwell4620  If you want to see why its wrong, do the double entry for your scheme.
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  7.  @stephfoxwell4620  So a Bank gets £100. Where's that come from? Depositor or Share holder? Remember assets + equity = capital. Second where's £1000 coming from? What's on the other side. To keep it simple for you. Just state which side each of the two entries go to? Asset, Equity, or capital. For example, if that £100 is share holders then you have one entry in equity, one in capital.
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  8.  @stephfoxwell4620  Balance sheet shows £100 cash and £900 Which is a loss. So the borrower comes in and says, hand over the £1000 I borrowed. Er, you can't have it but you still owe us money. You are missing transactions.
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  9.  @stephfoxwell4620  I've asked for you to create the accounting entries. I've not even asked for credits and debits to make it very easy. Liabilities + equity = assets That's the accounting equation. That's true for all transactions and hence for the balance sheet at all times. What you have posted doesn't conform to basic accounting. The reason is you have missed off transactions that happen in the real world and you are effectively making one sided entries. Like the Post Office Horizon system. So start with the transactions. List them and we go from there.
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  10.  @Mulberry2000  Did money exist before 27 July 1694?
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  11.  @stephfoxwell4620  1) The accounting equation liabilities + equity = assets. Any disagreeement there? 2. £100 paid in by a share holder. Equity +100, assets (cash) +100 All hunkey dorey, any issue? 3. That loan Assets(cash) - 1000 Assets(loans) +1000 All balanced, and remember for a bank, your liability is their asset. But where's the £900 cash magically appeared from?
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