[complianceowl]

Banks require us to give them large amounts of trust. We deposit our money. They lend that money out, while the general public is under the impression that you deposit money and it stays there. The bank's very business model relies on all of their depositors not needing/withdrawing their money at the same time; should everyone happen to need/withdraw their money at the same time, the bank would fail. Fractional reserve banking at its finest.

[nradov]

That's not really how modern banking works anymore. The vast majority of loans aren't funded by customer deposits.

[JAlexoid]

A lot of people don't understand how securitization works at all.

[ineedasername]

>the general public is under the impression that you deposit money and it stays there

After decades of reruns and annual 24-hour marathons of "It's a Wonderful Life" I don't think the general public is unaware of this very basic aspect of the banking industry. I knew by the time I was 8 that the money was in Joe's house etc., and I didn't grow up in a household that had any particular knowledge of the banking & finance industry.

If you asked most people "Do banks keep all of the money everyone deposits in one big vault, or a bunch of little vaults, all of the time?" I think most people would at least have some vague notion that the answer is "Um, No?"

[jandrese]

You don't have to trust the bank, as long as the bank is a FDIC member and you're not depositing personal business amounts of money you only need to trust the government to keep your deposit safe.