The Functionality of Full Reserve Banking - by an Illuminati silver subscriber

1,493 views · Published 24 January 2016 · 7:57 · Indexed 26 September 2026

Channel: The 2% Brief · 2016 · People & Blogs

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Today is Sunday 24th January 2016 and we are producing the first of our ‘subscriber videos’ – and it’s by Al from Arkansas and his view on the ‘Functionality of Full Reserve Banking’.

‘A thousand years ago all of the world’s functioning banks used full reserve banking. In an era of almost no parity across the world, it is interesting today that all countries in the world have a fractional reserve banking system. On top of that, all but a few extreme outliers like North Korea have a central bank which controls monetary policy.  Full Reserve Banking must then be clearly inferior to Fractional Banking and archaic as the abacus. Right? Well, maybe not. 

Before diving into the functionality of the full reserve banking system, it would be good to have a running definition. A full reserve bank would keep all of demand deposits in the bank’s possession and would likely charge a fee to store the depositor’s money.  

Overall, a full reserve banking system would be likely to be more honest to its depositors on how exactly how their money is being used. The fractional reserve system just seems to be a way to charge less interest for loanable funds so the banks can make a tidy profit. Although it seems unlikely any major country or entity will experiment with full reserve banking again, one small firm or country could spark the much needed change if proved successful in implementing a full reserve banking system.
END.

So what are your thoughts on Al’s article and what advantages and disadvantages do you foresee with what he proposes?

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