Just want to confirm a point about fractional reserve lending if possible: my understanding is that a bank can lend up to 90% of it's reserves under fractional reserve lending. So if they have 100k in deposits, they can create a loan for 90k.
Does this mean that they actually loan out 90k of the money they have... or do they keep the 100k on deposit and create 90k out of thin air? ... Is that accurate?
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