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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79 upvotes, 2 downvotes (98% upvoted it)
Archived In case you didn't know how banks; local, regional or federal, operate (imgoat.com)
submitted ago by ARsandOutdoors
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[–] WORF_MOTORBOATS_TROI 1 point -1 points 0 points (+0|-1) ago
This isn't creating money. The op is adding credits and debits. On a balance sheet the deposits are all on one side of the balance sheet for money owed to others, while the loans are on the other side as money owed to the bank. The 10% "fractional reserve" is the amount that they must keep on hand in order to pay out tbe money owed to others in the event that a customer comes in to collect. That's why they pay more interest for a CD or something where you agree you won't collect until a certain future date.