Great story. I'm not an economist, but seems to me that's the way the system is supposed to work.

However, at least two parts have been left out of the story. First, where did the Russian get the E100? Let's say he borrowed the E100 from the central bank and the bank got it by printing it up in its basement. When the Russian returns the money to the bank then the circle is complete.

However, if everyone charged interest on their loans, as businesses do, including the bank, then the story is incomplete. That extra money would have to come from somewhere, since the original E100 doesn't cover it. It eventually has to come from that central bank, that prints it up in the basement, and then charges interest on it, which keeps it in business, and the circle expands, etc.

Just guessing.