How Is Money REALLY Created? NOT Fractional Reserve Banking

banking system central bank

Ostensibly, the Reserve Requirement Ratio (RRR) was created to provide a liquidity buffer to ensure that a bank had Reserves to cover customers rushing to move their funds out of that bank, in other words, a bank run.

This is possible because banks in this day and age are theoretically “supposed” to be lending out their Reserves in order to create money in the economy.

Read More

the pensive nugget blue background logo

Get a different perspective on all things trading & investing every week!