involved in settlement of govt securities issues can be considered the sovereign? This is incorrect if so imo. The quote reads like the author thinks the banking entity involved in settlement of govt securities issues can be considered the sovereign? This is incorrect if so imo. Maybe we could call commercial banks that are government chartered public/private entities "franchises" from the sovereign. They get to use the sovereign's unit of account to lend, thereby creating deposits that function as money, but they cannot affect net financial assets as the sovereign can because the deposits they create are offset by loans, so commercial banking in aggregate nets to zero. However, banking can be a profitable franchise if run prudently, and it can also provide a public service by acting as an agent for government, performing services that government would otherwise have to provide directly, e.g., through a national bank. A bank's balance sheet has assets and liabilities, which are mainly loans and deposits. Banks assets are considered private sector, non govt. assets because there is a private sector equity investment. And more to your point, the banks create loans which are non govt liabilities, and deposits which are non govt assets. The same is true with 'pure' govt lending as well. The private sector winds up with assets, the proceeds of the loan, and liabilities, the promise to pay it back. So lending from banks or govts does not create/destroy net financial assets the way govt spending and taxing does. However,