Money & WorkFact

Your bank only has to hold 1% of your deposits in reserve.

Banks in the euro area must keep a fraction of customer deposits as minimum reserves at the central bank. Since 2012 the ECB's ratio has been 1%. Of €100 in your account, only €1 is parked as reserve at the ECB; the rest is tied up in loans and securities. It works because customers never all withdraw at once.

Useful: That's exactly why banks need deposit insurance and trust, not just vaults.

Source: de.wikipedia.org

BankEzbGeldsystem

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