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Old 31-10-2017, 09:37 PM
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Quote:
Originally Posted by Hpalace View Post
I was always under the impression that if you were to deposit 100 into the bank from your savings the bank would have 100. From that 100 they are able to issue loans at a multiple of your 100. Say for example 10 times (I have no idea what the multiple is these days) meaning that from your 100 they can lend 1000. That 900 doesn't actually exist - it's magic.
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I'm not sure they can do that directly I think they have to keep a percentage of the initial deposit something like 10% it used to be higher for building socs. I'm sure Alder can fill all that in.
Here's a vid that explains it and how multiple loans effectively do that.

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