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Financing -- Loans/Question about banks.....


In( loans create deposits) system , when bank credit my account with $1000 and bank figure out how to get reserve requirements ,and capital requirements . Now I want to withdraw $1000 , could bank give it to me ? Or bank borrow it and give to me ?

Banks hold considerable amounts of cash in "reserve" to accommodate such requests.

If you wanted to withdraw a large sum of money that exceeded the bank's on hand reserves, then they would simply contact the Federal Reserve, who would return to the bank some of the money that the bank has on loan to the Fed. to return your deposit.

Small amounts they wilkl fund out of petty cash.

Financing -- Loans

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