Bank balance sheets and fractional reserve banking | APⓇ Macroeconomics | Khan Academy

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This video breaks down a bank's balance sheet even further by walking through assets, liabilities, equity, required reserves, and excess reserves.
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Опубликовано:

11 июл 2018

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Комментарии : 27

@luarkas 3 года назад

Really funny explanation video... stopped in the middle... probably the electricity stopped or the fraud began...hahaha

@mjsmcd 2 года назад

Hasnt the reserve requirement been eliminated now?

@nwgverified 6 лет назад

Good info

@eldrain88 2 года назад

More!!!!!

@mdfahim8792 3 года назад

Tnqu sir

@jadamgreen 3 года назад

Banks don't lend reserves. The way fractional reserve is taught is bad accounting that misunderstands the modern monetary system.

@aishathalima6043 6 лет назад

i want more videos about science

@PascalH9191 Год назад

Banking is science

@stochastictarget 3 года назад

Loans are not limited by reserves since credits make deposit and not the converse, via money creation. Official documents explain that.

@magahongkong4664 2 года назад

It's old school dude. Banks went around the system to enhance their operations. Right now, you are right that loans are created first and deposits are the money on an account of the borrower. The difference is the addition of "bond holding" which is proof for IOU from the borrower. Notice, bond holding is not only the principle but adding in interest. So my understanding is that all banks start with some amount of cash (asset) and cash (equity) to balance out. When someone borrows, banks just imagine the discussed number and poof > there are 2 numbers that appeared out of thin air called loan and reserve. To balance that out, banks put the total of loan + reserve as a deposit on the liability side. There is also something called bond holding to prove that the borrower owes money to the bank both principle and interest. At that point, the borrower's balance sheet will have an amount of cash on the asset side but a bigger number on the liability side because he has to pay interest. So banks have to go through and approve that the borrower is able to pay that interest in the future to issue the loan. In the case of withdrawal. Banks will cancel loan + reserve on the asset side and deposit on the liability side to give borrowers cash. But notice, a bond holding category still appears on the bank's asset to prove that banks have something the borrower is holding temporarily. This is my understanding of credit creation.

@thePot_ Год назад

That's right bro, all videos on youtube on this matter are wrong. I am glad BOE officially published it

@aishathalima6043 6 лет назад

like force and many more.......

@auricdude 4 года назад

No bro the required reserve is the demand deposit. The potential excess reserves is 9 mil $, but you have to acquire assets on the open market. What you calculated would make the required reserve ratio at 55%.

@latifahnambi2136 Год назад

thank u🤎

@h0tie 6 лет назад

We all got fooled, game of musical chairs now. Not until we overhaul this value system

@Juoa794 3 года назад

5:30 - I believe this is wrong... the limitation to how much the bank can lend is dictated by the banks’ capital , not reserves

@MRK1sauce 3 года назад

Do you mind explaining the difference between capital and reserves? My understanding was that the reserve is capital that the bank is holding onto in house

@raphael5165 2 года назад

MRK1sauce The equity. I think that's what he means.

@syl7180 Год назад

He said required reserve is dictated by the amount of demand deposits available, which is true

@SirenaSpades 2 года назад

5:53 The pyramid scheme of banking and/or fiat.

@musarra195 Год назад

I wish SVB watched this video

@massive218 6 лет назад

8th

@tsunningwah3471 6 месяцев назад

mmmm

@raphael5165 2 года назад

5:53 and this, kids, is how you get financial crisis.

@caseyhoward9101 5 месяцев назад

Fractional reserve banking isn't a thing anymore.

@JDoubleOP 5 лет назад

Money out of thin air. The money will never fully return, because it came into 'life' by mortgage or a loan. Why doesn't it come back fully, because you pay interest. Interest and taxes are like 'theft'. Welcome to current slavery. The current monetairy system will hold on as long as it is profitable. Our industry is changing, robots will do more of our work. If robots are doing our work(a robot doesn't earn money) and we don't have the money, the system will collapse. It's just a matter of time. So we have to adapt to the changing world and give people a sort of base income during this transistion period. If not, the system collapses, while people don't have the money to buy the produced goods. Our work will change to more creative jobs. People who can create and program robots/machines. We will have more free time, because machines will do the jobs. Maintaining the machinery will and must go on. It's all about mindset and seeying the whole picture. Next level of evolution of mankind. End of Keynesian economics. We must think in durabillity, renewable energy, clean foods, aquaponics, permaculture, vertical greenhousing, in balance with mother earth.

@jaymills1720 2 года назад

Deposits don’t create loans. Loans, in fact, create deposits. Also fractional reserve banking hasn’t existed since 1970. This video should be removed. You’re misinforming people.