Fractional reserve is a reference to banks needing to keep a fraction of their customers’ deposits but are allowed to invest/lend out the rest. Some people think this means keep a fraction of customers cash on hand because liquid assets are often referred to as cash in accounting even if it isn’t actually paper money.
I never imagined that any banks would ever keep cash in any large quantities. That seems like it would be extremely annoying for everyone when you can just let other companies handle the cash and ATMs and instead just send money digitally. I can imagine any banks has operated like that for a few decades at least.
Fractional reserve is a reference to banks needing to keep a fraction of their customers’ deposits but are allowed to invest/lend out the rest. Some people think this means keep a fraction of customers cash on hand because liquid assets are often referred to as cash in accounting even if it isn’t actually paper money.
Ah, I got you. Thanks for explaining.
I never imagined that any banks would ever keep cash in any large quantities. That seems like it would be extremely annoying for everyone when you can just let other companies handle the cash and ATMs and instead just send money digitally. I can imagine any banks has operated like that for a few decades at least.