To reform #banking

Fractional reserve banking is what enables banks to pay #interest to the saver. It also makes banks susceptible to #collapse from a #bank #run.
If one wishes (nearly) 100% assured safety, only deposit one’s money in a bank that does not lend out at an interest rate, so a bank that only engages in the traditional role of warehousing. You pay a modest fee, but are assured that your money is there (bar events such as robbery, bankruptcy, earthquake, war…)
How could banks earn enough money to pay you(!) a fee for storing your money with them (the exact inverse)? Why, through

Fractional #reserve-banking

of course! By not keeping all the deposited money in reserve, but lending out a #fraction the bank earns #interest #payments, which are used to pay the worker’s salaries, saver’s interest mortgages on the bank-building, purchases of bank-safes, etc. This lending out of money to borrowers, makes investments possible (like the aforementioned mortgage on the bank-building, or mortgages for factory- or office-buildings), and thus economic growth. Regrettably, it also makes possible a bank run, where savers want to get back more money than the bank currently holds (some of which is loaned out to borrowers).
Citizens that are concerned about “greedy banks” or bank-runs might choose to keep their money in a bank, that only stores the money for a fee and doesn’t lend it to borrowers. Such banks no longer exist, one could easily purchase a safe and start advertising about your run-proof money-storage.
Except in today’s world, ever fewer payments are done in cash (#gold bullion), but rather electronically, so your money safe would likely remain quite empty & pristine.
One could engage in a different strategy, and take #CryptoCurrencies like #BitCoin or one of the many derivatives. So long as there is an internet (and you didn’t lose your password), you have access to your balance.


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I am an author & an anarcharchist

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