Fractional reserve banking is the system that lets banks lend out customers’ deposits. Many, or all, of the products featured on this page are from our advertising partners who compensate us ...

The money multiplier is a key concept in modern fractional reserve banking. Other multipliers include the deposit multiplier, fiscal multiplier, equity multiplier, and earnings multiplier.

This is the essential basis of fractional reserve banking. The biggest problem with this is that it relies on confidence; it relies on the bank judging that 10% is the right ratio. It relies on ...