3 ms·
A fun aside: Banks don't loan out deposits. https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp https://www.i
by auntienomen 8y ago
A fun aside: Banks don't loan out deposits.
https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp https://www.investopedia.com/articles/investing/022416/why-b...
- qaq 8y agothey sure do. Current fed rate is 2.0%
- WalterBright 8y agoI think that is a misreading of the article. A lack of bank deposits constrain lending, so banks need deposits in order to lend. Banks keep as little cash as possible, because (again) cash does not earn money. They try to lend out as much as possible. The people who borrow money don't sit on it, either, who wants to pay interest on money sitting in a pile? The whole cash hoarding theory is nonsense.