Banks hold 100% of their chequing deposits as vault cash to ensure that bank runs do not occur.

Name: Banks hold 100% of their chequing deposits as vault cash to ensure that bank runs do not occur.
Brand: Quizplus
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Question

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Banks typically hold only a small fraction of their deposits as vault cash and use the rest for lending and investment activities. To prevent bank runs, banks rely on measures such as deposit insurance and access to emergency liquidity facilities provided by central banks.

Banks Hold 100% of Their Chequing Deposits as Vault Cash