Archived In case you didn't know how banks; local, regional or federal, operate (imgoat.com)
submitted ago by ARsandOutdoors
Posted by: ARsandOutdoors
Posting time: 1.8 years ago on
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Archived on: 5/15/2019 10:00:00 AM
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Archived In case you didn't know how banks; local, regional or federal, operate (imgoat.com)
submitted ago by ARsandOutdoors
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[–] TheSeer ago
This is correct, but the full multiplier effect is perhaps easier to understand. Once everyone has deposited their money with the bank, there will be $1000 in reserves. AND $10,000 IN LOANS. From the one $1000 initial (new) deposit.
And get this. That is at 10% reserve ratio. Most Wall St banks are actually using 3% or less. Meaning they will loan out $30 - 50 THOUSAND, for every ONE THOUSAND in new deposits.