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by soVeryTired
1743 days ago
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In most counties in the west, reserve requirements don't constrain lending. For example, Canada, the UK, and Australia have a reserve requirement of zero. Fractional reserve banking doesn't really exist anymore outside of economics textbooks. Capital requirements are what constrain lending in the west (I think the Chinese government does try to control lending in part via a reserve requirement). For example, the "Core Tier 1 Capital Ratio" [0] is extremely important in this regard. https://www.investopedia.com/terms/t/tier-1-capital-ratio.as... |
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