What are banks for?
A Thought-Provoking Look at Banking The following excerpt, originally published in Punch magazine on April 3, 1957, has circulated widely over the years. It offers a satirical yet insightful look at the mechanics of modern banking—particularly what is often referred to as fractional-reserve banking. This dialogue is also featured in The Creature from Jekyll Island by G. Edward Griffin, a book many have found thought-provoking when exploring the history and structure of the banking system. A Conversation About Banks Q: What are banks for? A: To make money. Q: For the customers? A: For the banks. Q: Why doesn’t bank advertising mention this? A: It would not be in good taste. Q: When banks list large “reserves,” is that money they’ve made? A: Yes, in a sense. Q: And what about their “assets”? A: That is money they use to make more money. Q: Do they keep it in a vault? A: No, they lend it out. Q: Then they don’t actually have it? A: Not in that form, no. ...