“The actual process of money creation takes place primarily in banks … bankers discovered that they
could make loans merely by giving their promise to pay, or bank notes, to borrowers.
In this way banks began to create money.
Transaction deposits are the modern counterpart of bank notes.
It was a small step from printing notes to making book entries crediting deposits of borrowers, which the borrowers in turn
could ‘spend’ by writing checks, thereby ‘printing’ their own money.
– Modern Money Mechanics, Federal
Reserve Bank of Chicago