With negative interest rates on the way and more banks charging you to use your money, the common sense, natural response is to go into mattress stuffing or mason jar mode.
What happens if people start pulling cash out of banks?
For every dollar that you have in the bank there is actually 0.00061 dollars available…in other words, there’s 6 cents for every $100 dollars of deposits that you have at the bank.
The bigger the bank, the bigger the problem.
The fractional reserve requirements are 10% for the first 3 million in loans, 3% for the next 70 million, then after that there is no reserve requirement for loans (see the 7:40 minute mark). So the mega banks basically have to reserves.
And you thought the Dodd Frank Bill fixed the banking problems.