You are the bank's creditor, and the guarantee reaches 100,000 euros

You open your banking app and you see 4,200 euros. That is not a box with your name on it in the basement of a branch: it is an entry saying the bank owes you 4,200 euros. You are its creditor, and that is why it pays you interest when it pays you any: it is paying you for a loan you make it every day without signing anything.

In January 2012 the European Central Bank's cut in the minimum reserve ratio came into force, from 2% to 1%. For every hundred euros a euro-area institution holds in overnight deposits and short-term ones, it is required to keep one euro, on average, in its account at the central bank. The rest is lent, invested or placed somewhere, because that is what a bank lives on. That 1% is the legal floor, below which no institution may go; what each one actually keeps is more, because liquidity rules also require it to hold a buffer of sellable assets to withstand thirty days of heavy withdrawals.

Three years earlier, on 10 October 2008, twenty-five days after the fall of Lehman Brothers, Spain's Royal Decree 1642/2008 raised the deposit guarantee from 20,000 to 100,000 euros per holder and per institution. That is the figure still in force today, and the current Deposit Guarantee Fund for Credit Institutions, born in 2011 out of the merger of the three previous ones, kept it exactly as it was. Up to there, if the bank goes under, the Fund pays you, and pays you soon. Above it, you join the queue of creditors, though not at the back of it: since the European banking reform, money belonging to individuals and small firms that exceeds the guarantee is paid ahead of the bank's ordinary debt. Paid, that is, out of whatever is left. The 100,000 goes by banking licence: two commercial brands of the same group sharing a single licence also share a single guarantee, however different their branches, their signs and their apps.

Much earlier, in 1848, the British House of Lords decided the case of Foley v Hill with the sentence still quoted across the English-speaking banking world. A customer was demanding that his banker account for his money, on the understanding that he had held it in safekeeping. The court replied that money paid into a bank becomes the bank's money, to do with as it pleases, and that all the customer keeps is the right to be given back an equivalent sum. In Spain the rule is the same and arrives by another route: the irregular deposit of money, governed by article 309 of the Commercial Code, which leaves the bank as a debtor.

And at the origin, in seventeenth-century London, the goldsmiths took in gold coins in their strongrooms and handed over a paper receipt. The receipt was literal while the gold stayed put. As soon as the goldsmiths saw that almost nobody came for it at the same time, they began to lend it: the receipt became a banknote and the gold went out into the street.

The box with your name on it did exist, and it was full. It stopped being full the day the first goldsmith lent out somebody else's gold, and that was three and a half centuries ago.