Why is it that when a bank provides loans to people, it is considered a 'liability' on the bank's balance sheet? (Khan Academy Video-Related)
A checking account is considered a liability because bank essentially owes the amount on the checking account to the owner of the account.

If a bank loans someone money that is considered an asset on the banks balance sheet but if that person decides to open checking account at the same bank checking account becomes liability. The loan will still be recorded as an asset on balance sheet but the new checking account is still considered a liability because the money in it belong  to the borrower.

Also purpose of accounting is to track all asset and liability and equity changes. Even if a company would borrow money to company it itself owns  - which is more or less economically just juggling money around, it needs to be recorded in accounting.