Economic crisis spreading ! The Sudden Run On South Korean Banks Is Getting Larger
South Koreans have withdrawn massive quantities from savings banks since last week, when regulators published a list of banks with below-grade capital adequacy ratios. On Saturday five banks were asking for capital injections. By Wednesday a total of eight banks have suspended operations, according to JoongAng Daily.
Under the fractional reserve banking system banks may lend out many multiples of their actual cash deposits.In this way they gain interest on all the extra loans they can make make. The extra loans are made by simply creating debt entries on their books ,this is often called “creating money out of fresh air”. The extra cash money loaned out is provided by the central bank. Here is how it works . It may at first glance appear to be pure criminality , but it is just the everyday “respectable” banker norm. See
The Wall Street Ponzi Scheme called Fractional Reserve Banking Borrowing from Peter to Pay Paul by Ellen Brown http://www.globalresearch.ca/index.php?context=va&aid=11600 wikipedia Quote: When cash is deposited with a bank, only a fraction is retained as reserves, and the remainder can be loaned out (or spent by the bank to buy securities). The money lent or spent in this way is subsequently deposited with another bank and increases the cash reserves of that second bank, allowing that second bank to keep a fraction of the new deposit and lend or spend the remainder. Thus the excess cash travels from bank to bank to bank creating new deposits as it goes. Although no individual bank does anything other than lend part of what is deposited with it, the practice of fractional reserve banking in a multi-bank system expands the money supply (cash and demand deposits) to a large multiple of the cash reserves in all banks.[5] Due to the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by the excess reserves kept by commercial banks.[6][7]
To be considered solvent banks must retain sufficient cash reserve levels in case of bank runs when people demand their cash deposits back. Often they find the banks have very little in the kitty and the banks and even the whole banking system may “crash” if they cannot get sufficient, extra cash money loaned quickly from the central bank. When cash is deposited with a bank, only a fraction is retained as reserves, and the remainder can be loaned out (or spent by the bank to buy securities). The money lent or spent in this way is subsequently deposited with another bank and increases the cash reserves of that second bank, allowing that second bank to keep a fraction of the new deposit and lend or spend the remainder. Thus the excess cash travels from bank to bank to bank creating new deposits as it goes. Although no individual bank does anything other than lend part of what is deposited with it, the practice of fractional reserve banking in a multi-bank system expands the money supply (cash and demand deposits) to a large multiple of the cash reserves in all banks.[5] Due to the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by the excess reserves kept by commercial banks.[6][7]
I like Max Keiser but he is just flat wrong on this count. The people in Wisconsin are not protesting banker occupation, though perhaps they should be. They are protesting having to pay more for their pensions out of their pockets, and ending collective bargaining for gov't workers, which should have never been enacted to begin with.
Economic crisis spreading !
ReplyDeleteThe Sudden Run On South Korean Banks Is Getting Larger
South Koreans have withdrawn massive quantities from savings banks since last week, when regulators published a list of banks with below-grade capital adequacy ratios.
On Saturday five banks were asking for capital injections.
By Wednesday a total of eight banks have suspended operations, according to JoongAng Daily.
Read more: http://www.businessinsider.com/domin-bank-withdrawals-korea-2011-2#ixzz1EqrXIrz2
Under the fractional reserve banking system banks may lend out many multiples of their actual cash deposits.In this way they gain interest on all the extra loans they can make make.
The extra loans are made by simply creating debt entries on their books ,this is often called “creating money out of fresh air”. The extra cash money loaned out is provided by the central bank.
Here is how it works .
It may at first glance appear to be pure criminality , but it is just the everyday “respectable” banker norm.
See
The Wall Street Ponzi Scheme called Fractional Reserve Banking
Borrowing from Peter to Pay Paul
by Ellen Brown
http://www.globalresearch.ca/index.php?context=va&aid=11600
wikipedia Quote:
When cash is deposited with a bank, only a fraction is retained as reserves, and the remainder can be loaned out (or spent by the bank to buy securities). The money lent or spent in this way is subsequently deposited with another bank and increases the cash reserves of that second bank, allowing that second bank to keep a fraction of the new deposit and lend or spend the remainder. Thus the excess cash travels from bank to bank to bank creating new deposits as it goes. Although no individual bank does anything other than lend part of what is deposited with it, the practice of fractional reserve banking in a multi-bank system expands the money supply (cash and demand deposits) to a large multiple of the cash reserves in all banks.[5] Due to the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by the excess reserves kept by commercial banks.[6][7]
To be considered solvent banks must retain sufficient cash reserve levels in case of bank runs when people demand their cash deposits back.
Often they find the banks have very little in the kitty and the banks and even the whole banking system may “crash” if they cannot get sufficient, extra cash money loaned quickly from the central bank.
When cash is deposited with a bank, only a fraction is retained as reserves, and the remainder can be loaned out (or spent by the bank to buy securities). The money lent or spent in this way is subsequently deposited with another bank and increases the cash reserves of that second bank, allowing that second bank to keep a fraction of the new deposit and lend or spend the remainder. Thus the excess cash travels from bank to bank to bank creating new deposits as it goes. Although no individual bank does anything other than lend part of what is deposited with it, the practice of fractional reserve banking in a multi-bank system expands the money supply (cash and demand deposits) to a large multiple of the cash reserves in all banks.[5] Due to the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by the excess reserves kept by commercial banks.[6][7]
I like Max Keiser but he is just flat wrong on this count. The people in Wisconsin are not protesting banker occupation, though perhaps they should be. They are protesting having to pay more for their pensions out of their pockets, and ending collective bargaining for gov't workers, which should have never been enacted to begin with.
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