The
scam whereby
banks are permitted to
lend out
money and count the
debt as an
asset equivalent to
cash on hand. This is done under the
assumption that by the time the
depositors want their
money back, the
debtors will have paid their
loans back with
interest enough to cover the
difference.
This, along with fiat money, contributes to inflation.
When depositors want to withdraw more of their money than the bank actually has, you get a run on the bank.