Prior to electronic circulation, it would be ledger-entry circulation. The currency note or coin stays put, and it can be simultaneously spent by multiple people by making the appropriate ledger entries, rather than moving the physical note or coin.
The source of the Bank Hate, as you put it, is that the depositors, the source of the reserves, are offered 0.5% interest rates on the savings account, whereas all the loans, totaling nine times the size of the deposit, are earning 4% or more.
You deposit $100, and get $0.50 in interest. The bank loans out $900 and gets at least $36 in interest. Since this would not be legally possible without the actual deposit, one may wonder why the depositors are not offered greater incentives to increase their deposits. And the answer is often, "F U, that's why. Have another $5 fee just for asking, and now we're going to play games with funds availability on your deposited checks and incoming transfers."
Legal or not, it offends the primate sense of fairness. It is very likely that the sense of fairness would be satisfied simply by making the interest rates on savings accounts equal to the interest rate on 30-year mortgages for lowest-risk borrowers. You get $4 for your $100, and the bank still gets at least $36, minus default risk.
The source of the Bank Hate, as you put it, is that the depositors, the source of the reserves, are offered 0.5% interest rates on the savings account, whereas all the loans, totaling nine times the size of the deposit, are earning 4% or more.
You deposit $100, and get $0.50 in interest. The bank loans out $900 and gets at least $36 in interest. Since this would not be legally possible without the actual deposit, one may wonder why the depositors are not offered greater incentives to increase their deposits. And the answer is often, "F U, that's why. Have another $5 fee just for asking, and now we're going to play games with funds availability on your deposited checks and incoming transfers."
Legal or not, it offends the primate sense of fairness. It is very likely that the sense of fairness would be satisfied simply by making the interest rates on savings accounts equal to the interest rate on 30-year mortgages for lowest-risk borrowers. You get $4 for your $100, and the bank still gets at least $36, minus default risk.