• Knock_Knock_Lemmy_In@lemmy.world
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    10 days ago

    bank is required to keep 10 percent in cash

    Not correct. Your liabilities need to be sufficiently smaller than your assets. Capital reserves don’t need to be in cash.

    someone else has 180, that money has been ‘created’ out of thin air

    200 dollars went in. 180 dollars came out. 20 dollars stay in the bank. No dollars have been created.

    Look up fractional reserved banking.

    Look up solvency frameworks

    • Takumidesh@lemmy.world
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      9 days ago

      Money hasn’t been printed, but for the bookkeeping, 3 individuals who have contributed a total of 200 dollars, have in their accounts 380 dollars.

      When a bank loans your money out, as we are well aware, they don’t change the account in your balance. In order to do that, the dollar being loaned must be duplicated somehow. This is normal to how fractional banking works, and guidelines and requirements for how much specific money you need to maintain doesn’t change that.

      The only way to change it is to switch to full reserve banking.

      If a bank is able to loan out your money, without also removing it from your account, it is by nature created, the money is in two places at once.

      • TwentySeven@lemmy.world
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        9 days ago

        Money hasn’t been printed, but for the bookkeeping, 3 individuals who have contributed a total of 200 dollars, have in their accounts 380 dollars.

        Person A’s account: $100 Person B’s account: $100 Person C’s account: -$180

        This does not add up to $380.