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This is a common misconception. The reality is that banks lend money at interest rates above what the central bank offers them, meaning they can lend as much as
by smaddox 11y ago
This is a common misconception. The reality is that banks lend money at interest rates above what the central bank offers them, meaning they can lend as much as they want irrespective of deposits, and then borrow reserves from the central bank at a lower rate.