How Fiat Banking and Fractional Reserve Banking Work

The US banking system works on a, on a system of fractional reserves. This means that banks have the ability to go out and lend out the majority of customers' deposits. And why do they do this? Well, growth, right? We reference it as GDP, but GDP isn't the best measure for growth. Each of these three bank failures had to do in large part or in small part with the risk associated with their securities portfolios.

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