Is There a Contractual Relationship Between Depositors and Banks?

If depositors are choosing that fractional reserve bank on their own free will, it's the market because they're offering a higher interest rate. If I'm taking certain risks and knowing you're going to lend out my capital presumably to give me a yield of some kind, well, then I was a knowing actor in that exchange. That's a violation of contract. You know, another fascinating thought experiment is to try to think through if we could have full reserve banking without state intervention.

Transcript

Play full episode

Remember Everything You Learn from Podcasts

Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.