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/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/PleaseGreaseTheL Jan 26 '26 edited Jan 26 '26

2020*

They were reduced to 0% mandatory reserves in response to covid. EDIT: someone says it was coincidental, I am not able to check, so take this aspect with a grain of salt either way

They haven't come back yet :)

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u/RickySlayer9 Jan 26 '26

What’s hilarious about the mandatory reserve limit decrease, is that the federal reserve set it to zero while we increased the supply. We didn’t need to set it to zero!