3 ms·

fractional reserve banking != loans

• maxerickson 13y ago
  Yes it does. I think maybe you are talking about the money creation that a central bank can do. That involves more than just fractional reserve banking, but it often is done in the context of fractional reserve banking.
  • antr 13y ago
    > Yes it does. Wow. Information/knowledge is one click away. I highly advise Google.
    • maxerickson 13y ago
      I searched out this: https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/banking-and-money/v/banking-3--fractional-reserve-banking https://www.khanacademy.org/economics-finance-domain/core-fi... It would be useful for you to explain how 'making loans of deposits' is not a reasonable simplification of that. Of course actual banking practice is more complicated, but the core meaning of fractional reserve banking is to make loans (or investments, but that is a reasonable thing to leave out in a simplification) out of (demand) deposits (the difference between a deposit and a demand deposit is just a technical matter, for btc the lending institution and depositor would have to work out how immediately available the deposited coins would have to be).