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That works fine if you want to be 100% collateralized in cash. Nobody wants to do that because it’s expensive. edit: https://youtube.com/watch?v=PDNZX2nql2Y ht
by beervirus 5y ago
That works fine if you want to be 100% collateralized in cash. Nobody wants to do that because it’s expensive.
edit: https://youtube.com/watch?v=PDNZX2nql2Y https://youtube.com/watch?v=PDNZX2nql2Y
- kibwen 5y ago"Ironic. They could save others from fractional reserve banking, but they could not save themselves."
- perl4ever 5y agoI am not a banker, but I believe banks have to have assets to cover all of their deposits, and more, by law. Fractional reserve is about how they have to have a small fraction of liquid stuff to deal with withdrawals. The usual idea of fractional reserve banking people have on the internet is a myth, it would be an insolvent bank, I believe. And banks don't have to have just $1 in assets for every $1 deposited, but they have to have a little more in case some of their loans go bad.