I will go read the paper but I think you are misinterpreting the findings.
Bank lending is constrained by reserve requirements. Banks can make loans and that might seem like printing money and in a way is but they must have reserves to do it or they will be sanctioned by the Fed. Banks can only lend to the limit of their reserve requirements.
The Fed pumped up banks reserves with Quantitative Easing. The Fed did the money printing, they added trillions of dollars to their balance sheet when they bought paper from the banks flooding the banks reserves with cash.
"The deposits didn’t change, neither did the extra reserves from central banks. It was simply created new credit for the customer."
In this you acknowledge the role of the central bank and sure the loans did not change the reserves but the did change the reserve requirements. If you have excess reserves, you don't have to add reserves when you make a loan.
This is deceiving.
"Although most bank customers think that the bank will transfer money to your account, that doesn’t happen. There is no transferring because the money doesn’t come from another place.
It is created out of nothing."
Most loans are not to ourselves they are to a third party and yes when I borrow money to buy a car or house the bank will transfer money to the sellers accounts.
There are limits to how much money Banks can lend and that is set by the Fed.
"Banks have the legal power to put on their balance sheets that they owe money to the customer, meaning they assume the liability in their balance sheet and create money to give to the customer.
Banks are, therefore, the ones that increase the money supply."
Banks might be printing the money but is still the Fed who decides how much they can print. The Fed had a problem with the banks. The Fed could not get the banks to print enough money. They pumped up the banks reserves but the banks could not find qualified borrowers to whom to loan the money. Qualified borrowers were already flush with cash, everyone else was a bad risk.
In the following you underestimate the impacts of intermediaries.
"If banks were mere intermediaries, they would have little impact on the economy. Instead, however, they are the ones that decide who gets the money and how much."
Yes, they are the ones that decide who gets how much money, that is the role of the intermediary. It is a powerful one. The Fed decides how much money to print and the banks decide who gets that money. In this case the banks decided to keep a lot of it for themselves.
TEK
