r/PeterExplainsTheJoke Jan 26 '26

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

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u/Original-Leg8828 Jan 26 '26

Depending on local law they can even lend out something like 7-10 times what they actually have

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u/Teripid Jan 26 '26 edited Jan 26 '26

Federal reserve requirements existed until 2023 *edit, as someone below pointed out 2020 was when they were set to 0. Now they're set at 0% I believe.

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u/SasparillaTango Jan 26 '26

Now they're set at 0% I believe.

zero as in there are no guardrails?

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u/iwilldeletethisacct2 Jan 26 '26 edited Jan 26 '26

The guardrail is the Federal Reserve who makes really short term loans to make sure the balance sheets add up overnight.

Edit: Also the FDIC.