We Just Went From Fractional Reserve Banking To Zero Reserve Banking And It’s A Pretty Big Deal
I don’t know if you paid attention to what happened in March of 2020 with all the coronavirus talk but the U.S. got rid of its reserve banking requirements during this crisis.
We just went from a fractional reserve banking system to a zero reserve banking system.
This is historical.
For most of U.S. history, our laws require banks to hold a reserve for all of the money on their books.
Banks, by law, were required to hold a minimum of 10% of their holdings in reserves so they can meet their obligations in case of an emergency.
They just got rid of that requirement on March 26, 2020.
Banks are no longer required to keep any percentage of their deposits in reserves.
The FDIC (Federal Deposit Insurance Corporation) is a government entity that was created to insure your money that’s in the bank up to $250,000 guaranteed in case banks can’t meet their obligations.
