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Things are a bit more complex than that, Pai Mei. Banks can "create" money, but they cannot create too much money. Their outstanding loans have to be covered by a certain amount of cash. At least in my country, the national bank dictates the percentage cash vs. loans.
Suppose your world bank creates 1 million dollars for a loan, but the client wants it in cash? Or suppose all the people that put their money in said banks (loaned it to the bank, in fact) want their money back, in cash, because they don't trust them any more? It's happened before, and banks have gone bankrupt because of it. Whole economies have been driven into depression because of it...
Furthermore, inflation (created by a bank's excess money-making) is bad. Not only do the outstanding loans lose their value (compensated by high interest rates), but the actual cash they have to cover those loans also loses it's value. Besides, lots of inflation means people won't be able to repay their debts and/or interest; they need the money to buy food. This leads to lower profit; the profit the bank does make also goes down in value because of the inflation. In the end, high inflation can lead to a lower net income for the bank and it's owners.
As for the idea that governments can simply print money to get rid of their debts: look at Germany after world war one. They had massive debts (compensation for the war). The only way to repay the debts was to print large amounts of extra money (luckily the debts were in German Marks). The debts vanished, but there was massive inflation. This led to an economic nightmare, which in turn led to global recession and depression. Afterwards it also indirectly led to the second world war...
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