Should we be scared of zero reserve banking?


New member
I read online that a few months ago that the Federal Reserve moved all banks from a fractional reserve system to a zero reserve system. In theory this means that banks now don't need to have any reserves, whereas before they had to have a percentage of their deposited money availabe as cash reserves.

Now it's practically impossible to sway many people at once to move their money off of banks because they will do everything they can to keep you as as a customer keeping your money in their bank. And they do this because they themselves can't survive everyone withdrawing their money at once (and the fractional reserve was like 10% before which wasn't much better, but I'm sure 10% of all customers wouldn't withdraw their money at once), now if even several people withdraw enough money, it will either go bust, like Lehman Brothers in 2008, or it's going to be bailed out with a loan financed with taxpayer money. And where will they get the money to repay the loan? By deceiving naive clients to buy bank products they don't need. So now that money they deposited that isn't really there, even that money gets depleted.

The entire situation is grim and fundamentally flawed, and this news doesn't change anything except for giving banks a larger risk of becoming illiquid. It's not "Fed saves the day for banks" news either. Think of it as a metaphor of price where it broke a support and continues to dump.

You don't even own part of your money anymore, you own none of it, and how are people going to adopt bitcoin en masse if banks can't sustain moving money out of them? Banks own your money, which they don't even have.


New member
The the average person the whole banking and cash system doesnt look great...

The systems aren't at cost of the tax payer and as you said have been sanctioned by the FED. The government doesn't pay for stuff with taxpayers money it just supplements itself with it - printing money to banks is not a cost to the taxpayer it's a wealth tax on those holding cash.

I'm not sure of the protocols for banks current reserves (previous were around 3% so we may find out again soon) but loans are already priced into the market from the point they're taken imo.


New member
From the position of a bank client, I must say that I have very little or almost no trust in banks - especially when I know what kind of scandals they have found themselves only in the past ten years. I must also say that I do not like that as a long-term client of the bank I have to go to the bank from time to time to prove that I am not a person who has anything to do with terrorism or money laundering. Therefore, I will soon close all my bank accounts, except for one that I need and for which no one has yet asked me to justify its existence.


New member
In principle, I think that banks should have >90% reserve and when it comes to completely canceling the necessary reserves... this is too much.
It will be very sad to watch the fall of banks in case of force majeure - but I will not feel sorry for the banks. I will feel sorry for people who put their earnings in such banks.
But now you can clearly understand where the banking system as a whole is going, turning from a reliable (at least a little) safe into a cellophane bag with knives.


New member
Banks derive their financing from two sources, the first is the central bank and the other is the reserve that the bank must keep + what clients deposit or withdraw during a period of time, say, for example, a day or a month.
We have a health crisis that caused the printing of a lot of money, so instead of borrowing from the central bank, the banks have the right to use their reserves for financing, but I think that there will be a huge package of supplies that the central bank will provide to these banks, so 10% will not pose a risk.

The next crisis will not come from the banking market, but rather the real estate markets or technology stocks, whose explosion will cause a global disaster.


New member
with zero reserves it is a disaster. When banks open, they must have reserves to prevent when the economy collapses or encounter some risks, they can still compensate. That is why central banks are so important. Bank reserve levels will also affect the economy much, so they need to calculate it properly. Too much reserve is also not good and without it would be a disaster, so we need to be careful with banks with low reserves.