Investments glossary

Deposit Multiplier

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Quotes of the day:

Chains are chains even if made of gold, they just tie you.

— Patrick Mahony

The term deposit multiplier refers to the amount of cash that a bank must keep in its reserve. The deposit multiplier is normally a percentage of the amount on deposit at the bank. The deposit multiplier requirement is key to maintaining an economy’s basic money supply. Reliance on a deposit multiplier is called a fractional reserve banking system and is now common to banks in most nations around the world.

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