Not exactly. They take deposits and loan out a multiple of them.
In the US the reserve requirements range from 3% to 10%. So the money lent is 10x to 30x that deposited.
Or something like that. I really don't understand this stuff.
In the US the reserve requirements range from 3% to 10%. So the money lent is 10x to 30x that deposited.
LOL, nice work if you can get it.
Imagine having ten bucks and being able to loan out $300 in credit to other people while charging them interest on that imaginary money.
And then having cops come and arrest them for theft if they don't pay you back all of your imaginary money, plus interest, in real money.
That's literally what banks do.
Impossible. Fractional reserve means they hold a fraction of deposits. Which means they loan less than their deposits, not multiples.
In the US the reserve requirements range from 3% to 10%. So the money lent is 10x to 30x that deposited.
Nope. Loans would be 90%-97% of deposits, using your numbers.
I really don't understand this stuff.
I know.
You understand it well enough to avoid being lied to.