Since 2020 Your Bank Is Allowed to Keep Zero of Your Deposits

24 Oct 2026 · 1 min

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In this informal monologue, the speaker explains that, as of 2020, banks in the United States are legally permitted to operate with no required reserves on customer deposits—a system the speaker calls “no‑reserve banking.” The speaker asserts that banks can therefore loan out 100 % of deposited funds. He then illustrates a hypothetical scenario where all banks fully lend out their deposits, leading to a reliance on the Federal Reserve’s “lender of last resort” function. The speaker criticizes this safety‑net, arguing that the emergency bailout mechanism is invoked far too frequently—essentially every few years—turning a rare crisis tool into a routine crutch. The overall tone is informal, emphatic, and highly critical of the regulatory framework and its repeated use of bailouts.

Chapters

So we live in an economy right now where the bank legally does not need to hold any of the dollars that you give it in bank deposits. It is called no-reserve banking. Fractional reserve banking is an old term since 2020. When I'm talking about zero, it is legally allowed to keep zero in the bank. They can loan out 100% of your proceeds. Now, let's say hypothetically they loan out 100% and there's like 14 banks and they're all loaned out. What happens next? It's the lender of last resort. See, the weird— the thing that pisses me off is they call it the lender of last resort. But there's so many last resorts. They just continually use— it's like, it's like you got this button, like it's for only emergencies, like devastation, Armageddon, and they're just like, like every 3 years. Like literally, bro. So the lender of last resort will bail the bank out.