[neilwilson]

What is a gilt or a Treasury? It is a private saving certificate bought by people in exchange for bank deposits they have previously accrued.

Those bank deposits are transferred to Treasury by deleting the bank deposit and by the bank transferring central bank credits back to the Treasury.

Where did those bank deposits originate from? From the government transferring central bank credits to the payee bank and the payee bank then crediting the deposit account.

If the individual chooses to hold the bank deposit, then the bank itself will purchase the government security with the credits it received from the central bank when government made its payment.

Does that clear it up for you?

The full gory details in the UK case is here: https://doi.org/10.1080/00213624.2025.2533726

[Starman_Jones]

Thank you for clarifying. That's certainly a theory.