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A comment on The Crash of ’87, from the Wall Street Players Who Lived It. Parent comment

Re:The Crash of ’87, from the Wall Street Players Who Lived It by misja111 on Wednesday October 18, 2017 @02:55AM (#15497403)
From your quote: "..and then look for the required reserves later."

Banks are required to have certain reserves. It's true that they can already lend money while they are still looking for the required money to refill their reserve. But they will have to fill up their reserve at some point, and for that they need money, otherwise they will have to stop lending.

So it is not a fallacy that banks are lending deposits and it's not so strange that this is in the textbooks.

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Re:The Crash of ’87, from the Wall Street Players Who Lived It by RobertoG on Wednesday October 18, 2017 @06:19AM (#15498000)
Banks can get reserves three ways:

-From deposits. -In the interbank market, where banks with excess reserves lean to bank that need reserves. -From the Central Bank.

The Central Bank always lend the necessary reserves. A different issue is if that would be a good business for the bank.

The point is that the quantity a bank can lend it's not limited by deposits as the normal narrative imply.

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