Is it really a misconception? I’m not an economist but is what @crablab wrote really that inaccurate?
I thought fractional-reserve banking was exactly that: Banks have to reserve a fraction of your deposit as required by regulations and can lend/invest the rest. Money supply increases by virtue of the fact that depositor is not locked out of his money and the bank has a duty to honour his deposit. We can get into all sorts of arguments:
*Philosophical, what is money? A load of numbers on computers?;
*Semantics, is money really “created” or is it just accounted for twice? Would the creation of a negative credit not offset the “creation” of this money.
Ultimately what he said in response to the comment he was replying to within the context of this topic: That monzo will make money from your deposits even if you yourself are not paying fees, is as accurate as needs to be.
I would argue that money is not created, and that crablab was 100%, money simply isn’t there as is evident by the fact that banks will go bust (or require rescuing) and be unable to honour our deposits if we were all to simultaneously try and withdraw our money. As has happened in depressions.