In fractional-reserve banking, a bank keeps only a fraction of its deposit in reserve.

Name: In fractional-reserve banking, a bank keeps only a fraction of its deposit in reserve.
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Fractional-reserve banking is a system in which banks keep only a fraction of their deposits in reserve, and lend out the remaining amount to borrowers. This allows banks to earn interest on loans, but also creates the risk of bank runs if too many depositors try to withdraw their funds at once.

In Fractional-Reserve Banking, a Bank Keeps Only a Fraction of Its