SIR – In his letter (T&A, January 8), Ron Harding carries on the tripe emenating almost daily by your correspondent C Hindle about banks making money out of thin air.
Nonsense, they make it out of money deposited with them by people who would rather make a little money by way of interest while the banks earn money by means of higher interest rates.
When I buy a tin of beans I pay more for it than the shop has paid the producer, who has sold it to them at a price higher than the cost of producing it. When one takes out a loan from a bank one pays for the service at a higher price than the cost of providing it.
It is all money, yes, but only the Bank of England can authorise the printing of it.
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