> they can practice Full-reserve banking. ??? A bank makes money by taking deposits (giving interest) and then lending them out (collecting a higher interest).

> they can practice Full-reserve banking. ??? A bank makes money by taking deposits (giving interest) and then lending them out (collecting a higher interest). The reserve percentage is that amount that remains unlent. Full reserve = no loans = no profits = no bank. Edit: Yes, you can practice full-reserve with a negative interest rate, which is effectively a safe-deposit box does (they charge a fee for the box). That is the tl;dr of the wiki link.