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by seanhunter
1242 days ago
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This really is nothing to do with and nothing like fractional reserve banking, and fractional reserve banking really is nothing like how it is frequently described on the internet in breathless tones. For people who are genuinely serious about understanding capital requirements for banks, I strongly recommend reading the Basel framework[1]. It’s not going to set your pulse racing but at least you won’t be recycling some “explanation” that has been made up by someone who doesn’t understand it themselves. And in point of fact as a sibling comment has pointed out, eliminating reserve requirements for deposits doesn’t eliminate capital requirements, which banks still have and are still in place. [1] https://www.bis.org/basel_framework/index.htm |
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