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0 pointssocks4y ago0 comments

> They can't lend money without deposits. The deposits are the money they lend.

I am fairly certain this isn't true, at least not in the US/UK.

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1 comments · 1 top-level

It’s somewhat true in the sense that banks need to keep some fraction of their deposits in cash as reserves (the “reserve ratio”). So if they lend money it needs to be backed to that extent by their deposits.

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