We are arguing over semantics. Bank lending doesn’t create money, it creates debt. Issuing debt is only creating money if you don’t count liabilities. Is $100 liabilities and $100 assets, net $0 or net $200? Only in whacko-economics land is it considered $200.

If I receive a loaf of bread, and promise to give it back on demand, I record a liability of 1 loaf of bread and asset of 1 loaf of bread. If I then lend the bread to someone else, I still have 1 loaf liability and 1 loaf asset, but now the asset is a loan. How many bread loafs exist after I loaned it out? In whacko economics we have 2 bread loafs. In reality there is still 1 loaf of bread. No bread was created.

So you might say, “but IOUs are money, debt is money, and banks charge interest, so when they lend they increase net assets such that assets > liabilities.”

Yeah, so necessarily debt must be greater than money supply. Where does the net interest come from? What happens if there’s not enough money to service the debt? The central bank creates money. AKA “monetizing the debt” or “quantitative easing.” It’s the central bank that creates money, not bank loans. And they don’t borrow anything to do it.