What is money?
Money is the generally accepted medium of exchange in an economy and is used as a unit of account and a store of value. Central banks are very specific when it comes to measuring the amount of money in an economy, defining money as the financial assets held by households and businesses that are readily usable as a means of payment. The figure below shows that, according to this definition, coins and banknotes account for only a small portion of the money supply, with the vast majority consisting of bank balances, mainly current and savings accounts. The amount of money in the economic system is forever changing. Money creation is the process by which the money supply is increased. As banks play a key role in this process, they are referred to as "money-creating institutions".