Café

I'm gonna let you in a little secret - MMT principles isn't actually that crazy and quantitative easing has been in the arsenal of first world/OECD economies for a while now. Malaysia too isn't a stranger to this imo, if anything the notion that it's crazy is new and pretty much came together when "deficit hawks" and talking about a balanced national budget like that's a sensible notion isn't laughed out of normal society (basically from the Reagan-era onwards). That's why QE as a terminology had to be invented because in that fiscal school of thought, the spectre of WW2 German hyperinflation made such things verboten. Of course this is my "I should be sleeping" muddled way of putting things.

Where you're getting concerned is applying MMT for retail banks. No, this is out of their domain. This is for entities that control the flow of money IE actual fiscal regulators (your central banks lah). No one else can print legal tender. Remember this. (ETA: if a household when audited cannot prove how they got their income, they get investigated. If a retail bank gives out loans based on fraudulent value of their reserves - which isn't the same as a central bank reserve - they are also breaking the law. Because MMT is quite literally the creation of more currency, you cannot apply commonsensical understanding of what it means to be saver or spender to this. Retail banks cannot actually inkjet laser print more money. If they have no more reserves to loan out, they cannot lend.)

Last point to at least help you reorient your thinking: remember, as a global civilization none of our currencies are backed by gold or any asset. It's fiat currency. Meaning instead of printing money only as far to the actual gold you have, the state has the authority to dictate the flow of currency. Then it battles it out in the market, which is one way to frame how inflation happens. MMT is basically saying, and if you look at today's economies there's merit to their argument, the flow of cash isn't a direct factor to increased inflation. Because it turns out there are other issues (such as elite capture of such cash that they got thru grants or subsidies that they immediately deposit into savings and "investments" instead of circulating it in the economy as intended).

Oh and the absolute last point: this is still ONLY talking about monetary policy. Financial regulations and policymaking needs one more dimension: fiscal policy. At that point is where MOF comes in, through taxation policy and other social rebalancing of wealth initiatives.