Most people assume their money is safely sitting in the bank, but that’s not how modern banking works. In today’s system, the reserve requirement is effectively 0%, meaning banks can lend out nearly all of your deposits.
This structure allows banks to become highly over-leveraged, increasing the risk of bank failures when too many people try to withdraw their money at once. In this video, we break down how the reserve requirement works, why banks lend out your deposits, and what it means for the stability of the banking system.
YouTube link ⬇️
https://youtube.com/shorts/m9iv8BATn8w
#shorts #viralshorts #ReserveRequirement #FractionalReserveBanking #learnaboutbit
This structure allows banks to become highly over-leveraged, increasing the risk of bank failures when too many people try to withdraw their money at once. In this video, we break down how the reserve requirement works, why banks lend out your deposits, and what it means for the stability of the banking system.
YouTube link ⬇️
https://youtube.com/shorts/m9iv8BATn8w
#shorts #viralshorts #ReserveRequirement #FractionalReserveBanking #learnaboutbit