What standard or rule controls total money transactions in a bank (especially internet banks) so that they don't create money for themselves?

As I understand it, banks can create money as they loan. So what if some manager decides to create free money for himself?

  • What do you mean "create money as they loan"? – BrenBarn Jul 24 '15 at 19:22
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    This appears to conflate the idea that bank loans increase the "money supply" as a macroeconomic concept, with "creating free money". Read the examples under section "M1" at this Wikipedia article, and adjust the question if this does not clarify it: en.wikipedia.org/wiki/Money_supply – user662852 Jul 24 '15 at 19:39
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    Questions about economics should be asked at economics.stackexchange.com – Chris W. Rea Jul 24 '15 at 19:47
  • Are you a manager at a bank? – NuWin Jul 24 '15 at 23:41
  • No, I am consultant in IT field, totally irrelevant. I just wanted to know. @Nuwin – FarhadGh Jul 25 '15 at 4:26

Banks are audited, for obvious reasons. Their software is carefully audited and protected, also for obvious reasons. A branch manager can't normally bypass those without getting caught quite quickly. He might be able to issue himself a loan -- but it will have to be a loan that at least appears to conform to the bank's standards, and he'll have to pay it off just like any other loan.

  • Can you add a reference? – FarhadGh Jul 25 '15 at 4:25

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