Talk:Fractional-reserve banking

message: Hi  SPECIFICO,
how about this?
Maybe you like it?
Ok, well, it is trivial,
but if you need ...
Best regards, CGB 41.66.96.108 (talk) 15:56, 29 August 2023 (UTC)
thread_title:  Table by IMF to OECD maybe you wanna ... ? 

message: There has been some exchange of opinion during the last days in edit summaries on the wording in the first, definitional sentence in the lead. Avatar317 has made this partly reversion, which I do not find quite satisfactory. I think, however, that a consensus could be reached as to a reformulation.
I believe that the present formulation is simply erroneous, the problem being the last part of the definition: that banks are required to keep a certain proportion of their deposits as reserves. This is not true in "almost all" countries today, a considerable number of countries, including some of the economically most important ones, not making any such requirement. I do not think, however, that this last part is a necessary part of the definition. Mankiw 2022, for example, simply says that a FRB system is one in which banks keep only a fraction of their deposits in reserve. This is clearly true of countries such as the US and Denmark, only the fraction is not determined directly by monetary authorities, but by the business policies of the commercial banks themselves. I suggest we simplify the first sentence to reflect this, which would make the "almost all countries" claim true (indeed, I believe it is true for all countries today). I also recommend we mention the hypothetical alternative, full-reserve banking, explicitly in the lead, to clarify what is the alternative to FRB, and explicitly mention some of the countries that do not impose a requirement, mainly the entire core Anglosphere. And then I recommend that we remove the references from the lead entirely, adding some referenced sentences in the main text with the same message that the lead can draw upon, so that the lead does not present statements that are not covered in the main text. Økonom (talk) 08:29, 10 November 2023 (UTC)
replies: text: I agree with all your suggestions above: mentioning FRB as the the hypothetical alternative, moving the references, and the rewording.  I think we should also mention the history of the diminishing reserve requirement, because IIRC, reserve requirements did exist and were often 5-15% in many countries decades ago.  I'm not familiar with the specificity of what they were so I don't have the knowledge to craft that statement, nor have I seen sources covering that history.  Separately, I would guess that "almost all countries" would be a more accurate claim than "all countries" since I am guessing that there are a few countries which do not have a functioning banking system. (but I may be wrong). ---Avatar317(talk) 22:46, 10 November 2023 (UTC)

text: This is a tricky business because, among other things, there are plenty of otherwise Reliable Sources that are not up to date on current regulation and capital requirements that -- in the limiting case -- define the banking systems. "Fractional" reserve, suggesting a specific fraction or ratio, is now better described as "partial" reserve or someting similar. SPECIFICO talk 03:50, 11 November 2023 (UTC)
thread_title:  Definition