3 ms·
It doesn’t just imply it, that is exactly what it is. The bank is loaning your money out and then some (multiplied by whatever the current reserve ratios are).
by jtms 7y ago
It doesn’t just imply it, that is exactly what it is. The bank is loaning your money out and then some (multiplied by whatever the current reserve ratios are). They quite literally don’t have the money you deposited, but just owe it back to you if you ask for it. That’s one of the ways a bank makes money.
- WorldMaker 7y agoIt's easy to forget in an era where checking and savings accounts have interest rates so low the average person earns no interest on their cash.