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Why should we be paying interest?

Published 17/11/2015

Ask the vast majority of people how money is created and they won't know the answer. Some will say the Royal Mint creates money. But physical money only accounts for 8% of the world's currency. The rest is created when banks issue loans.

The vast majority of money is electronic and is created from nothing at the point when figures appear in bank accounts after lenders have received loans.

Sir Mervyn King, ex-governor of the Bank of England, said in a speech: "When banks extend loans to their customers, they create money by crediting their customers' accounts." So why do we all dutifully pay interest?

LOUIS SHAWCROSS

Hillsborough, Co Down

Belfast Telegraph

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