USA doesn't have fractional reserve banking anymore (federalreserve.gov) 6 points by scotty79 3y ago ↗ HN
[–] DevX101 3y ago ↗ This sounds like a big deal and the first I'm hearing about this. What's to stop a bank with $1 million in deposits from loaning out $1 trillion? [–] Finnucane 3y ago ↗ High likelihood of eventual bankruptcy. [–] DevX101 3y ago ↗ Yes, and some # of banks will do it nonetheless. Sounds like the U.S. taxpayers will be rescuing some failed banks very soon.This can't end well. [–] scotty79 3y ago ↗ Doesn't seem to work because inflation went through the roof.
[–] Finnucane 3y ago ↗ High likelihood of eventual bankruptcy. [–] DevX101 3y ago ↗ Yes, and some # of banks will do it nonetheless. Sounds like the U.S. taxpayers will be rescuing some failed banks very soon.This can't end well. [–] scotty79 3y ago ↗ Doesn't seem to work because inflation went through the roof.
[–] DevX101 3y ago ↗ Yes, and some # of banks will do it nonetheless. Sounds like the U.S. taxpayers will be rescuing some failed banks very soon.This can't end well.
[–] raincom 3y ago ↗ There are two competing hypotheses: (a) deposits create loans (fractional reserve system); (b) loans create deposits (This is from some sections of post-Keynesians from Wynne Godley, MMT, etc).Only the mainstream folks teach (a).
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[ 2.6 ms ] story [ 42.9 ms ] threadThis can't end well.
Only the mainstream folks teach (a).
https://www.federalreserve.gov/econres/notes/feds-notes/impl...