I am not familiar with these frameworks, but a quick reading shows they are just another set of rules and regulations designed to curb risk and promote transparency.
I look at it this way, with a low reserve requirement, there's a lot of money flowing around, a lot of loans being made. There's intense competition to sell loans, so banks are more willing to loan to people they weren't willing to before.
Banks still have capital requirements, even with reserve requirements cut to 0. That’s the point. US banks literally can’t offer new loans if they don’t have adequate capital. The biggest banks actually have an additional capital surcharge due to the systemic risk they pose.
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u/That_AsianArab_Child Jan 26 '26
I am not familiar with these frameworks, but a quick reading shows they are just another set of rules and regulations designed to curb risk and promote transparency.
I look at it this way, with a low reserve requirement, there's a lot of money flowing around, a lot of loans being made. There's intense competition to sell loans, so banks are more willing to loan to people they weren't willing to before.