Do banks loan money?
Journal of Business Ethics · 1982 · Volume 1 · Issue 3
Abstract
There is an obvious and important difference between bank ‘loans’ and typical personal loans, viz., that banks charge interest in order to make a profit. Accordingly, what banks do is more accurately described as selling or renting money than as loaning money. Moreover, it is advantageous to banks misleadingly to describe their activity as loaning. For this assimilates their activity to the case of personal loans and helps to create an impression that banks do us a favor by loaning us money and that we owe them gratitude for so doing. Since these impressions are false, banks ought cease to describe what they do in this way.
Keywords
Economic Growth, Personal Loan
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