[kgwgk]

> Fractional reserve banking is a model of how banking works but it's a wrong model. [...] They try to attract deposits from other banks because they need enough bank reserves

Not completely wrong, after all.

[mempko]

Ultimately it's the capital that the banks have that limit how much they can lend, not reserves. Their capital requirements are the limit. Once capital falls below a certain percentage, the bank is in trouble.

[mempko]

It's a useful model the same way a toy hotwheel is a model of a car. Yes they both have four wheels.

Notice the issue that SVB had was a huge influx of deposits and not enough loans.