Re:The Rise of Airbnb's Full-Time Landlords
by Spivak on Tuesday November 10, 2015 @12:26PM
(#10540723)
This is literally fractional reserve banking and it's the foundation of our financial system.
The money in your bank account isn't really there. Technically some of it is there but how much depends on your government's regulation -- it will probably be somewhere around 15%. The rest is just a number in their database and the actual money is given to their financial department to play the market.
They provide you banking services and give you a terrible interest rate, they pocket the difference, you have near zero risk since you're insured, and both parties are happy.
The money in your bank account isn't really there. Technically some of it is there but how much depends on your government's regulation -- it will probably be somewhere around 15%. The rest is just a number in their database and the actual money is given to their financial department to play the market.
They provide you banking services and give you a terrible interest rate, they pocket the difference, you have near zero risk since you're insured, and both parties are happy.
https://en.wikipedia.org/wiki/Fractional-reserve_banking