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RE: Bounty 10 Steem: Who creates the fiat money
I am no financial expert, but I would think at least part of the the reason banks would not give out loans solely based on being given 10% down would be because of the possible risk to their profit margin/ profitability as well as their reputation with investors if too many loans of that sort were defaulted on. They would need some level of proof of your ability to pay back the money in order to be worthwhile to the bank long-term.
I dont understand this reasoning. If the money is created out of thin air, the bank has no risk. And profit margin would be infinite even when the loan is defaulted on.
Only if they themselves have to borrow the money from the central bank do they carry a risk.