The economics concept that banks must retain a reserve while lending the rest; Jiang uses it as the conventional model he then complicates.
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fractional reserve
The economics concept that banks must retain a reserve while lending the rest; Jiang uses it as the conventional model he then complicates.
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Key Notes
Jiang argues that even under fractional reserves, banks expand money beyond deposited cash; the important point is that bank accounting creates money in practice.
The economics-class answer to banking is fractional reserve logic, but Jiang says the real system creates a larger balance sheet by treating the loan and deposit as coexisting claims.
Timestamped Evidence
"You cannot loan all the money that you have. They will have a limit like 25%. I don't know. Okay. Maybe 10%. So you..."
"...good. So in economics, you learn about the idea of the fractional reserve system. Okay? What's fractional reserve? As you say, you must leave..."
"...good. So in economics, you learn about the idea of the fractional reserve system. Okay? What's fractional reserve? As you say, you must leave..."
Relevant Lectures And Readings
The first Secret History class begins with Kant and ends with alchemy.
The first Secret History class starts with Kant and ends with alchemy.
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