system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How money is stored by banks and brokers?

For example, we know that some brokers are not allowed to lend your money to third parties (like a bank) nor invest it in any interest-rate paying note or bond.  
Then how can money by held by these institutions in a virtual manner? I assume they don’t hold your money in another bank either as this would also count as lending your money.
gpt
Lloyd's of London broker here.

Brokers don't really do anything. We come up with a product, like an insurance for cat paw injury. 

We then convince an "underwriter" who works for some variety of bank that there is a market for them, and then if they agree then they "underwrite the risk" which means they will reserve an amount of money to be used for claims.

Then we, the broker, sell the products to consumers like show cat owners in this case. We manage the claims, payments and so forth but we don't keep the money.

We make our money from the bank, who give us a percentage.

So basically us brokers don't store our own money.