4 ms·
fractional reserve banking makes the assumption that you can predict what the loan market will look like if you need to sell off any assets. relying on your ab
by nazgulnarsil 18y ago
fractional reserve banking makes the assumption that you can predict what the loan market will look like if you need to sell off any assets. relying on your ability to predict the future is not sound finance.
- eru 18y agoOK. Though I liked explicit term-deposits better (and they would also work with that idea).
- daydream 18y agoHow is something universally practiced (as is fractional reserver banking) not sound finance? The current crisis was not brought on by retail/commercial banks. It was caused by investment banks using way to much leverage, and trading complex financial instruments that where the risk was poorly understood.
- nazgulnarsil 18y agofallacy of the appeal to the majority. the current bank crisis was caused by alan greenspan's credit bubbles. the first one causes the dot com boom, the second caused the housing boom and was used to cover up the first.