Monday, October 22, 2012

Full-Reserve Banking

Now there's a novel idea:

'Full-reserve banking, also known as 100% reserve banking, is a banking practice in which the full amount of each depositor's funds are kept in reserve, as cash or other highly liquid assets. In other words, funds deposited are not lent out by the bank if the depositor has the legal right to immediately withdraw their funds. Some proposals for full reserve banking systems do not place such restrictions on deposits that are not available on demand, where savers can entrust their money with a bank in time deposits or in 'investment' accounts.[1]'


No comments:

Post a Comment