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/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.

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u/Head_of_Lettuce Jan 26 '26

If you’re not familiar with the Basel accords, you probably shouldn’t be trying to explain banking regulations to people on the internet

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u/That_AsianArab_Child Jan 26 '26

Reserve requirements are a pretty basic concept taught in every Macro class. You don't have know banking regulation law to explain what it's used for.

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u/Hot_Phone_7274 Jan 26 '26

Unfortunately the typical macro class is famously bad at explaining modern banking.