Uploaded March 2026 | Updated September 2026, 3 weeks ago
Banks want to keep you in debt. That's how banks make money, and it's the core truth about how banking works that most people never learn. In this video, I explain the banking system simply, highlighting the three things banks actually do:
- bookkeeping,
- borrowing your money, and
- lending.
But here's the key to understanding money creation — banks create money from nothing when they lend. They don't lend your savings. They tap numbers into a keyboard and charge you extraordinary interest for the privilege, sometimes seven or eight times the Bank of England base rate on credit card debt.
This is how the money supply really works, and why fractional reserve banking means bank profits come at your expense. Whether it's mortgage debt — a term that literally means "the grip of death" — or personal debt, UK households are drowning in, borrowing is designed to make you miserable. This isn't financial literacy they teach in schools. It's financial education for beginners that the banking industry would rather you never had. Understanding economics explained this way gives you the tools to protect yourself.
If you want real financial independence and genuine financial freedom, the first step is knowing how banks work and why they will always be trying to fleece you. Never trust a bank. Keep clear of bankers. They really do not care about you.
00:00 — The myth: banks as your “friendly helper”
01:10 — What banks actually do: bookkeeping explained
02:20 — Deposits: why your money becomes the bank’s money
03:30 — Why banks pay low interest on savings
04:40 — How banks really lend: money creation explained
05:50 — Loans from nothing: the reality of bank lending
06:50 — Interest, risk pricing and how banks make profit
07:50 — Why banks need you to stay in debt
08:40 — Mortgages, credit and lifelong indebtedness
09:30 — Conclusion: how to deal with banks and protect yourself
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
HIT SUBSCRIBE & GET NOTIFICATIONS
Subscribe and get notified of new videos released.
INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#BankingSystem #MoneyCreation #DebtEconomy #PersonalFinance #BankingExplained #HowBanksWork #FinanceEducation #CreditSystem #EconomicReality #InterestRates #DebtTrap #Mortgages #CreditCards #FinancialSystem #BankOfEngland #MoneyMyths #EconomicEducation #WealthInequality #FinancialLiteracy #PoliticalEconomy #FundingTheFuture #EconomicsExplained #DebtCycle #FinancialPower #Capitalism #EconomicTruth #BankingCrisis #MoneySystem #FinanceTruth #StayOutOfDebt
Banks want to keep you in debt. That's how banks make money, and it's the core truth about how banking works that most people never learn. In this video, I explain the banking system simply, highlighting the three things banks actually do:
- bookkeeping,
- borrowing your money, and
- lending.
But here's the key to understanding money creation — banks create money from nothing when they lend. They don't lend your savings. They tap numbers into a keyboard and charge you extraordinary interest for the privilege, sometimes seven or eight times the Bank of England base rate on credit card debt.
This is how the money supply really works, and why fractional reserve banking means bank profits come at your expense. Whether it's mortgage debt — a term that literally means "the grip of death" — or personal debt, UK households are drowning in, borrowing is designed to make you miserable. This isn't financial literacy they teach in schools. It's financial education for beginners that the banking industry would rather you never had. Understanding economics explained this way gives you the tools to protect yourself.
If you want real financial independence and genuine financial freedom, the first step is knowing how banks work and why they will always be trying to fleece you. Never trust a bank. Keep clear of bankers. They really do not care about you.
00:00 — The myth: banks as your “friendly helper”
01:10 — What banks actually do: bookkeeping explained
02:20 — Deposits: why your money becomes the bank’s money
03:30 — Why banks pay low interest on savings
04:40 — How banks really lend: money creation explained
05:50 — Loans from nothing: the reality of bank lending
06:50 — Interest, risk pricing and how banks make profit
07:50 — Why banks need you to stay in debt
08:40 — Mortgages, credit and lifelong indebtedness
09:30 — Conclusion: how to deal with banks and protect yourself
TRANSCRIPT
A transcript for this video is available at: taxresearch.org.uk
IF YOU WANT TO WRITE TO YOUR MP ABOUT ISSUES IN THIS VIDEO
If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions, here. taxresearch.org.uk/Blog/2025/06/20/chatgpt-prompt-for-a-letter-to-your-mp
HOW TO SUPPORT US
Please consider donating: ko-fi.com/taxresearch
ABOUT RICHARD MURPHY
Richard Murphy is Emeritus Professor of Accounting Practice at Sheffield University Management School. He is director of Tax Research LLP and the author of the Funding the Future blog. His best-known book is ‘The Joy of Tax’.
This video was edited by Thomas Murphy.
RICHARD MURPHY ON BLUESKY:
https://bsky.app/profile/richardjmurphy.bsky.social
OR
ON MY BLOG: taxresearch.org.uk/Blog
HIT SUBSCRIBE & GET NOTIFICATIONS
Subscribe and get notified of new videos released.
INTRODUCTION: youtube.com/watch?v=HdHsRPy3060
PLAYLISTS:
The Wealth Series
youtube.com/playlist?list=PLvRueM6wBgobQLeyZYAagFDMjEFTKbhRD
Ecenomics
youtube.com/playlist?list=PLvRueM6wBgob54Gs-fOL-8OAQ-IpduwB4
Britain
youtube.com/playlist?list=PLvRueM6wBgobwTT4ATvJjsf8OO6S7wD10
Tax
youtube.com/playlist?list=PLvRueM6wBgoaMni_12J6ULp3yUJisUZoY
MMT
youtube.com/playlist?list=PLvRueM6wBgoZ6jvRGSW5YXu8qogE6aClX
Money
youtube.com/playlist?list=PLvRueM6wBgoYnLk1c7syTvoIo8bKYUs5m
Climate Change
youtube.com/playlist?list=PLvRueM6wBgob4_wsYaVivWd2WumpPLYwJ
USA
youtube.com/playlist?list=PLvRueM6wBgoYYd3dSyU2Oyl3x7bWJOP7H
Labour
youtube.com/playlist?list=PLvRueM6wBgoa-KhzG-fnjDSg1WROL1zMw
The Trump Administration
youtube.com/playlist?list=PLvRueM6wBgobz41-GLimTho27A3flVWQx
#BankingSystem #MoneyCreation #DebtEconomy #PersonalFinance #BankingExplained #HowBanksWork #FinanceEducation #CreditSystem #EconomicReality #InterestRates #DebtTrap #Mortgages #CreditCards #FinancialSystem #BankOfEngland #MoneyMyths #EconomicEducation #WealthInequality #FinancialLiteracy #PoliticalEconomy #FundingTheFuture #EconomicsExplained #DebtCycle #FinancialPower #Capitalism #EconomicTruth #BankingCrisis #MoneySystem #FinanceTruth #StayOutOfDebt
