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

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

AP(R) Macroeconomics on Khan Academy: Macroeconomics is all about how an entire nation’s performance is determined and improved over time. Learn how factors like unemployment, inflation, interest rates, economic growth and recession are caused and how they affect individuals and society as a whole. We hit the traditional topics from an AP Macroeconomics course, including basic economic concepts, economic indicators, and the business cycle, national income and price determination, the financial sector, the long-run consequences of stabilization policies, and international trade and finance.

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[luarkas]

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

[mjsmcd]

Hasnt the reserve requirement been eliminated now?

[jadamgreen]

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

[stochastictarget]

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

[auricdude]

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%.

[htie]

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

[Juoa]

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

[SirenaSpades]

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

[JDoubleOP]

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.

[raphael]

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

[caseyhoward]

Fractional reserve banking isn't a thing anymore.

[jaymills]

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.