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Is Fractional Reserve Banking Necessarily Immoral?, Ryan T. Beach, Jeffrey E. Haymond
Is Fractional Reserve Banking Necessarily Immoral?, Ryan T. Beach, Jeffrey E. Haymond
The Research and Scholarship Symposium (2013-2019)
When Deposits are made to a bank, the bank can loan out most of it, while claiming they have the money to pay you back. When you deposit money in a bank, only a fraction of it stays on deposit; the rest is loaned out. When the person receives the loan spends it, money goes to another bank, repeating the process. Ultimately, if the central bank puts $100 of reserves into the FRB system, $1000 of money could enter the economy.