Insightful Principles

IP #124: Overview Of Fractional Reserve Banking


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IN THIS EPISODE, YOU’LL LEARN:
2:25-What is Fractional Reserve Banking?
3:03-How much does a bank keep in reserves & lend?
3:36- How the Federal Reserve impacts economic activity
6:26-Challenges with fractional reserve system
Kevin discussed the system of fractional reserve banking. He also detailed how reserve requirements work in the banking world and how it’s a monetary tool the Federal Reserve will use.
Kevin explained what reserve requirements are and how all banks have a certain percentage of reserves that have to keep on hand. 
As well as how lending and credit is utilize to create more funds for the economy.
He explain the challenges of this system and why it’s an accepted practice amongst most banks throughout the world. 
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Insightful PrinciplesBy Kevin N Jenkins

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