a banking system cannot be fractionally reserved and sufficiently decentralized at the same time.
when fractional, reserves consolidate to the biggest banks.
with full reserves, banks big and small can all withstand a run.
a banking system cannot be fractionally reserved and sufficiently decentralized at the same time.
when fractional, reserves consolidate to the biggest banks.
with full reserves, banks big and small can all withstand a run.
we have a classic case of 'you can't have your cake and eat it too'...or in this case, you can't have your reserves and lend them out too
