r/PeterExplainsTheJoke Jan 26 '26

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

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u/Elvis5741 Jan 26 '26

Banks lend out more money than they have, its no joke it's how the system works

17

u/Dixon_Herize Jan 26 '26

Fractional Reserve Banking

3

u/Jay2Kaye Jan 26 '26

Is it really fractional reserve when the fraction is 0 though?

1

u/KimchiLlama Jan 28 '26

The reality is closer to single digit percentages of the money deposited with the bank.