Can a bank secretly create money?
I know via fractional reserve banking they can, whereby the asset & liability is created at the same time. Can say Barcalys,at a push of a button, electronically create £1m more in their account to sit on their Balance sheet as an asset?
Obviously this does not happen? But why?
Also, how do forex trading actually work? If financial institution A sells yen to Financial instition B (both based in London), how is it credited/debited to them. Can Financial institution A not electronic create yens to sell? I mean, the Japanese aren't going to know if someone in UK sold yen for sterling right?
Thanks
I know via fractional reserve banking they can, whereby the asset & liability is created at the same time. Can say Barcalys,at a push of a button, electronically create £1m more in their account to sit on their Balance sheet as an asset?
Obviously this does not happen? But why?
Also, how do forex trading actually work? If financial institution A sells yen to Financial instition B (both based in London), how is it credited/debited to them. Can Financial institution A not electronic create yens to sell? I mean, the Japanese aren't going to know if someone in UK sold yen for sterling right?
Thanks