David Graeber from the Guardian writes that:

When banks make loans, they create money. This is because money is really just an IOU.

And that the paper:

...co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong.

The truth is out: money is just an IOU, and the banks are rolling in it http://www.theguardian.com/commentisfree/2014/mar/18/truth-m...

The Bank of England Paper: Money creation in the modern economy http://www.bankofengland.co.uk/publications/Documents/quarte...

Edit: added more text to second quote.