The basic business of banks is to take deposits and make loans. The deposits have to be “risk-free”: A deposit in a bank account ought to be just “money”; depositors shouldn’t have to worry about it. The loans have to be risky: Lending money to people to start businesses or buy houses necessarily comes with the risk that they won’t pay you back. This is the magic, and the problem, of banking — that banks take risky loans and turn them into risk-free deposits — and there are lots of fraught imperfect ways to make it work.
No, depositors and borrowers share risk. Deposits in a bank are 'just money' but money carries currency risk, the risk that there is a sudden change in heart from either depositors or lenders. If we try to hide the risk from depositors, then the central bank passes the risk onto government. We cycle, we get periodic recessions.
The cause oif the cycles is simple, when currency risk is shared, depositors and borrowers are both motivated to match deposits with loans qnd the cycling stops.
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