Because this work is silent on the precise structure of the liability side, it does not draw much of a distinction between banks and other, nonbank lending intermediaries, such as finance companies.
Finally, a third class of theories explicitly addresses the question of what ties together the asset and liability sides of banks’ balance sheets – that is, why do the same institutions that create private money choose to back their safe claims by investing in loans and other relatively illiquid assets?5 What is the nature of the synergy between the two activities?