Because of fractional lending, banks only need to recover the deposits?

Discussion in 'Economics' started by crgarcia, Mar 23, 2009.

  1. crgarcia

    crgarcia

    Because of fractional lending, banks may lend more money than their deposits.

    However they only need to recover an amount equal to the deposits (not all the loans) and everything will be OK?
     
    #1     Mar 23, 2009
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  2. zzt

    zzt

    theres two sides on a balance sheet mate....your looking at one of them
     
    #2     Mar 23, 2009
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  3. deswamped

    deswamped

    Got any proof to back up that statement?
     
    #3     Mar 23, 2009
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