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RE: Fractional Reserve Banking

in #policits8 years ago

The banks don't loan out their deposits, Katz. When you take out a loan they simply type in two debts in two accounts. One is the banks debt to you in your account (your "loan"), that can be collected through an ATM to get the cash. The other debts is your interest bearing debt to the bank. There's no relationship to other deposits.

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