In a  podcast published a few weeks ago, NPR Moneys interviewed Niall Ferguson (author of The Ascent of Money,).  I summarized below some of the key ideas highlighted in the discussion:

• Bank assets. Most of those assets are banks loans. It’s the money banks lent to their clients.  This means bank customers’ liabilities. Bank assets are their client debts
• Money is any token accepted in payment of goods and services
• The key thing is money system is trust. We believe banks have (all of) our money. But they don’t because of the fractional reserve system
• Money is a relationship between a lender and a borrower