This part of the introduction makes no sense to me Alternatively a saver could entrust their money with a bank for investment in the full reserve equivalent of time deposits or savings accounts which in a full reserve system would represent loans made to the bank rather than deposits 1 A deposit in a bank is by definition a loan to the bank even though most people do not realise they are investors in a banks profit making operations Also the article is getting mixed up by the true nature of a fractional reserve bank A fractional reserve bank does not have sufficient on hand liquid assets to enable customers who have lent money to the bank to be paid out in a timely manner unless a buyer can be found for the illiquid loan book or loans can be secured against the loan book The bank of amsterdam was a warehouse bank You paid money to have your money stored at the bank the warehouse bank that lends customers savings money on term deposit still has the same problems if the loans go bad because it is in fact operating with fractional reserve The loans mean either deposits are created at the same bank or term savers money is no longer at the bank Either way you get two claims on the same money 1 by the saver and 2 by the money user If the bank fails then somebody ends up with less money andrewedwardjudd