User:Eyusuf/sandbox

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A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses.

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'A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets.' Actually banks don't channel deposits into lending activities. They channel money created from nothing into lending activities. 'Fractional reserve banking', which is the banking model of the majority of banks (actually I don't know of one that does not use this model), creates money out of nothing for loaning activities. Only a small fraction of a banks total loan book is required to be held in deposits. When this money enters the market 'the law of supply and demand' comes into play. The value that the bank has created reduces the value of everyone elses money. Thus one can say that the value of the money lent by a bank is stolen from everybody else. Banks are therefore really thieves who have a legal right to practice their robbery. A bank links together unsuspecting customers that have capital deficits with money who's value was stolen from everyone elses money. Whether this value was stolen from everybody else wittingly, or unwittingly is debatable. But the underlying principle still holds true; if you reduce the value of someone elses wealth without their permission. That is theft.

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Due to their influential status within the financial system and upon national economies, banks are highly regulated in most countries. Most nations have institutionalised a system known as fractional reserve banking, in which banks hold only a small reserve of the funds deposited and lend out the rest for profit. They are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.

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Due to their influential status within the financial system and upon national economies, banks are highly regulated in most countries. Most nations have institutionalised a system known as fractional reserve banking, in which banks hold only a small reserve of the funds deposited and lend out the rest for profit. This definition of 'fractional reserve banking is incorrect. The correct definition is as follows: A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. They are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords.