Weaknesses of Fractional Reserve Lending

As banks are only required to keep a fraction of all deposits as reserves, the risk is there for depositors asking to withdraw their deposits in droves in the event of unfavorable market conditions. How can a bank operating in this system ensure that it can fulfil its obligations to its customers? Watch this lecture about the weaknesses of fractional reserve lending.

Last modified: Friday, March 19, 2021, 4:53 AM