Sentences with phrase «fractional loan system»
Each company has a fractional loan system that allows multiple investors to fund just a small portion of a given loan.
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Similarly, in a fractional reserve requirement environment, when the depository institution system adds loans and securities to its assets, it «pays» for these asset acquisitions with funds created figuratively out of thin air.
As I have described above, it can be loaned into existence by banks operating on the fractional reserve system.
Each bank loan increases the money supply in a fractional reserve banking system.
The fractional reserve banking system rate dictates that for every $ 1 that is deposited, you get to loan out an amount of around $ 10, and this continues in perpetuity.
In the fractional reserve system, a bank can have loans of $ 100 for every $ 50 they have on deposit.
Central Banking 101 In the normal functioning of a fractional reserve banking system (McLeay et al., 2014), commercial banks create money when they take deposits and make loans.
the most truly inconvenient truth is that the world's economic system, which is based on fractional reserve banking (which essentially allows for printing money whenever a government chooses to do so, independent of any real productive value underlying the printed currency), which then requires constant growth to pay the interest on ever increasingly debt on the new «money» that is then used to create loans or government financing of whatever.
The fractional reserve banking system rate dictates that for every $ 1 that is deposited, you get to loan out an amount of around $ 10, and this continues in perpetuity.