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if an organisation is giving out money that it doesn’t have, presumably from the deposits of other clients, is that not just a ponzi scheme?
by permo-w 4y ago
if an organisation is giving out money that it doesn’t have, presumably from the deposits of other clients, is that not just a ponzi scheme?
- thedangler 4y agoYou do realize the US Banks run on 0 fractional reserve lending... They could do what ever they wanted with 0 cash to support the lending.
- permo-w 4y agoyou say that as if it’s a contradiction
- admax88qqq 4y agoThere are other rules on what they can do.
- hbarka 4y agoIt’s called Fractional Reserve Banking: https://www.investopedia.com/terms/f/fractionalreservebanking.asp https://www.investopedia.com/terms/f/fractionalreservebankin... However, I’m not sure what percent SVB kept. Some are saying zero, is this true? There is a requirement but not sure if easing of Dodd-Frank allowed SVB to bypass it. https://www.federalregister.gov/documents/2022/12/01/2022-26065/reserve-requirements-of-depository-institutions https://www.federalregister.gov/documents/2022/12/01/2022-26...
- permo-w 4y agocalling it something different doesn’t change the fact that when people came for their money it wasn’t there additionally it seems the US made their fractional reserve requirement 0% in 2020