FRACTIONAL-RESERVE BANKING: A system in which banks keep less than 100 percent of their deposits in the form of bank reserves and use the rest for interest-paying loans. Banks in the good old U. S. of A., as well as those in most other modern countries, practice this system of fractional-reserve banking.

     See also | bank | bank reserves | money supply | money creation | bank panic | Federal Reserve System | Federal Deposit Insurance Corporation | Great Depression | reserves | vault cash | Federal Reserve deposits |

FRACTIONAL-RESERVE BANKING, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2026. [Accessed: August 11, 2026].

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