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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