4 ms·
Doesn't the US have a fractional reserve banking system? For every $1 in bank reserves, the bank can loan out $9. So even if the special money of the Fed can't
by mmcconnell1618 4y ago
Doesn't the US have a fractional reserve banking system? For every $1 in bank reserves, the bank can loan out $9. So even if the special money of the Fed can't be used directly, it has the effect of allowing banks to have a larger base of reserves which means the banks can create money by loaning it out to others.