Where were these teachers when I was in school?
(twitter.com)
You're viewing a single comment thread. View all comments, or full comment thread.
Comments (30)
sorted by:
Is that first part true, that they get ten times from the Federal Window?
They have a 10% reserve requirement in the US. So, if they get 10 dollars deposited, they can loan $100. Whether they get it from the feds or wherever varies and this guys explanation is slightly simplified, but as a general rule $10 of cash is $100 of working money for the bank.
No, of course it's not true. u/ApexVeritas & u/ccpneveragain are BOTH wrong.
...
They did away with 10% reserve requirements back when Covid started. Depending on the depositor account it could be 1% or 0%. That includes your checking account, by the way.
It's called fractional reserve banking and lending. The banks, from the Fed down, can loan out 9 or 10 times (can't remember the exact number) of money than they actually have. The banks can then earn interest on that fake money.
Yes, it's true.