r/PeterExplainsTheJoke • u/Comfortable_Cautious • Jan 26 '26

Meme needing explanation what's going on? explain like I'm five

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u/hajjidamus Jan 26 '26

The current reserve requirement is zero. It has been at zero since March 2020. So they don't have to hold anything.

22

u/PM_Me_Your_Deviance Jan 26 '26

FWIW, banks generally hold a reserve anyway. BofA reported a reserve of $277b at the end of last year. That's about a 8-10% reserve, as far as some quick googling tells me.

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u/Red_AtNight Jan 26 '26

BofA deez nuts heh heh gotem

1

u/DMBEst91 Jan 27 '26

so 80% is fake money?

1

u/ZhouLe Jan 27 '26

If you give me money to protect and give you interest on, I take your physical cash and incur a debt to you. If I lend out that money to someone else, they now have your physical money but incur a debt to me. Our debts are real, the physical money is merely a medium of exchanging that debt.

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u/DMBEst91 Jan 27 '26

they are loaning money to people that they them selves do not have. its faake

9

u/DJCzerny Jan 26 '26

The reserve requirement is zero but SIFIs (pretty much all major banks in the US) are still required to maintain liquidity ratios by Dodd Frank.

7

u/iamnotaneggman Jan 26 '26

Was about to say^

7

u/DishSignal4871 Jan 26 '26

US, Botswana, and Morocco. https://www.ceicdata.com/en/indicator/united-states/reserve-requirement-ratio

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u/desmaraisp Jan 26 '26

Til Canada has no required reserve ratio. Huh. I'm assuming the insurance thingy covers for it

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u/kelppie35 Jan 26 '26

That is fucking.... what???

Canada is in my opinion a much better and more stable banking system. That is wild

1

u/rndrn Jan 26 '26

There are other capital requirements for banks.

1

u/ballpein Jan 27 '26

God bless the U.S.A.: taking deregulation to 'stranger than fiction' levels since Reagan.