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To: Toddsterpatriot

Oh, dear, I’m quite sure you’ve got that backwards.

Wiki: Fractional-reserve banking is the practice whereby a bank takes in deposits, creates credit or makes loans, and holds reserves (to satisfy demands for withdrawals) that are less than the amount of its customers’ deposits.


66 posted on 04/02/2015 9:47:13 PM PDT by Sherman Logan
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To: Sherman Logan
Fractional-reserve banking is the practice whereby a bank takes in deposits, creates credit or makes loans...that are less than the amount of its customers’ deposits.

How's that?

70 posted on 04/02/2015 9:54:59 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)
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To: Sherman Logan

Actually banks make loans that are a multiple of the deposits that they hold, rather than being less than their deposits.

Their reserves are only a fraction of what they loan out, ergo the name ‘fractional reserves’.


85 posted on 04/02/2015 10:17:31 PM PDT by Pelham (The refusal to deport is defacto amnesty)
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