money removal

[sammmo]

If everyone went to there bank and removed there savings ..What would the banks do?
We are not getting any interest on savings at the moment so if we started to remove savings would they have to increase there interest rates to keep us there.

[dasherman]

They would probably just borrow more.

[ubasses]

They would charge more to lend money as they would have to buy it in on the market.

[sammmo]

they couldn't charge more to lend out money because they wouldn't have any money to lend

[woofgang]

as i understand it, what banks lend is largely composed of what they borrow in big blocks from other financial institutions, not folk's savings.

[sammmo]

so what are savings used for?

[woofgang]

they are also invested by the bank but only form a small percentage of all the banks available load resource.