[jakehansen]

Is there an easy way to understand how the lack of a reserve requirement doesn't turn banks into infinite money machines?

Edit: Perhaps banks are infinite money machines, but what consequences do banks face that prevent them from writing blank checks?

[nullish_signal]

Consequences? Those are for Plebeians, since the Federal Reserve can just print more money.

From 2020: "Inflation Baked In As U.S. Money Supply Explodes" https://www.forbes.com/sites/investor/2020/06/26/inflation-b...

"A 33% increase in M1 (the most liquid portions of the money supply) in the last 12 months. A 105% increase (if you annualize it) in the last three months to May. You’d say that’s a 33% inflation rate baked in, right now."

[totony]

They have eliminated reserve requirement, but there still are capital requirements.