Legal tender is not the same as money.
Anyone can produce infinite amounts of money. Only the bank of england can produce infinite amounts of legal tender.
Legal tender HAS to be accepted by the person offered it, or the court system is not available for pursuing the debtor. "Offered a pound? Sorry mate you refused payment. " says judgey. "You took a piece of paper with £10,000 on it in black ink as payment but no legal tender changed hands? Sorry mate you accepted it as valuable", also says judgey.
Bank money DOES NOT have to be accepted by anyone, anywhere, ever. It just generally and usually is, because most people think that £10,000 on a bank's screen = £10,000 in cash sat in a vault. This is why an institution such as northern rock can have billions of "pounds" and also be skint.
Because the banks are all in their little cartel, they generally accept "screen money" or photons as payment from each other.. If Joe Public offers photons to the bank, the bank will refuse and demand legal tender, or photons from another bank (which will also demand legal tender from Joe Public). Things have ******ed up at the moment because the cartel has decided to stop playing ball with each other.
The main problem is that it's all held together by public ignorance and court corruption. Once a critical mass of people roll up to the bank and ask for their "money" the bank can either confess what it's done, ask it's buddies in threadneedle street to run the presses, or default on almost everything. As defaulting on everything will nuke the whole scam for all banks AND the BoE, confessing all will lead to a life sentence and the wife/kids of bankers being spat at in the street, then any bank that gets into trouble WILL be bailed out.
As is said around these parts, 100%, guaranteed.
I hope this clears it up a little.
You go to bank, sign loan form agreeing to repay yadda yadda. Bank treats this as though it were a promissory note, adds the value of your "loan" to the asset side of it's books.
i.e. - you sign form - Bank adds £10,000 of bank money to it's overall accounting. Or, accepts your signature for value.
You withdraw money - bank is now even on it's books and back where it started.
Bank now claims from you what it has "given" and "loaned" to you. If you pay them back on a £10,000 "loan", you have given them stuff to the value of £20,000 + interest.
This is fraud. This is double billing.
All banking is fraud.