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Why do banks keep some money in reserve rather than loaning out all their deposits?

2 Answers

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Answer: The same reason you would put money into savings for yourself. For emergencies.

For example The U.S is currently taking money out of the reserve to help with Coronavirus relief

User YPennylane
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howdy!

this is a check all that apply answer, here are the answers:

because they are required to by law.

because they have to meet the withdrawal requests made by customers.

Why do banks keep some money in reserve rather than loaning out all their deposits-example-1
User Barrette
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