Millennials are sicker than Gen X, which bodes ill for the future economy

Re:Millennials are sicker than Gen X, which bodes ill for th... by tonyedgecombe on Wednesday December 18, 2019 @03:48AM (#21823027)

>The observation that there appears to be no limit to the amount of credit money that banks can bring into circulation

That's not true, there is a limit on their minimum reserves or capital requirements depending on the location.

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Re:Millennials are sicker than Gen X, which bodes ill for th... by gerardfoucher on Wednesday December 18, 2019 @05:07PM (#21829979)

"minimum reserves..." In Eurozone, 1% of already issued credit. https://www.ecb.europa.eu/explainers/tell-me/html/minimum_re...

"or capital requirements" Basel Accords are a very complex system of ratios between bank capital (as a guarantee against bankruptcy) and bank credit (at risk of depreciation). The resulting ratio from these accords currently evolves between 0 and 9.5%. One important detail : Basel III is a "voluntary regulatory framework". A lovely oxymoron that means "you have to comply with this, if you want to." https://en.wikipedia.org/wiki/Basel_III

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Re:Millennials are sicker than Gen X, which bodes ill for th... by nradov on Wednesday December 18, 2019 @01:29PM (#21827724)

While you are technically correct, in practice reserve requirements aren't the limiting factor in bank lending.

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Re:Millennials are sicker than Gen X, which bodes ill for th... by jfoucher on Wednesday December 18, 2019 @04:25AM (#21823213)

Citation ?

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Re:Millennials are sicker than Gen X, which bodes ill for th... by badpun on Wednesday December 18, 2019 @04:48AM (#21823326)

Banking laws and regulations. In most countries, banks are required to physically hold (i.e. not lend further) as a reserve a fraction of the money in their customers accounts. This is to provide liquidity, protect against bank runs etc.

So, If a customer A has $1000 in his account and the reserve rate is 10%, the bank can only lent $900 to some other person B. Then, in turn only 90% of that can be lent further. If you run this to the limit, for a 10% reserve rate, the amount of money that can be generated by banks is at most 10x the physical amount.

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Re:Millennials are sicker than Gen X, which bodes ill for th... by dlp211 on Wednesday December 18, 2019 @04:50AM (#21823337)

https://www.google.com/search?q=bank+deposit+reserves&oq=ban...

Currently 10% of deposits for big banks, ie more than $124MM in deposits.

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