Full-reserve banking
Subject: Banking | Topics:

Full-reserve banking is a proposed alternative to fractional reserve banking in which banks would be required to keep the full amount of each depositor’s funds in cash, ready for immediate withdrawal on demand.¬†Austrian School economist Murray Rothbard has written that reserves of less than 100% constitute fraud on the part of banks and should be illegal, and that full-reserve banking would eliminate the risk of bank runs.¬†Currently, no country in the world requires its banks to keep 100% reserves.

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