What would happen if everyone held personal accounts directly with the central bank?

Asked Jul 4, 2014· 1 answer
Faisal KhanAnswered Jul 4, 2014
Where you hold your bank account is really not the issue. If a central bank were to provide deposit and checking facilities, that would be okay. The issues comes what the bank does from its deposits and how it invests and further lends this money, which is where the risk lies.

The whole concept of Fractional Banking is taking that One Dollar and lending it out multiple times over, and when someone defaults on their payback, the lenders and the depositors get affected.
Banking EconomicsCentral BanksCentral Bank Policy
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