But safe claims can be manufactured from risky collateral in different ways, and banks are not the only type of intermediary that engages in this activity.
What makes banks unique is that they use a particular combination of financial and institutional arrangements – including capital, deposit insurance, and access to a lender of last resort – as well as substantial investments in bricks and mortar, to create liabilities that are not only safe and money-like, but also relatively stable and thus unlikely to run at the first sign of trouble.