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commercial banks of accepting deposits, and making loans or investments, while holding reserves at least equal to a fraction of the
bank's deposit liabilities. Reserves are held as currency in the
bank, or as balances in the
bank's accounts at the central
bank.
Fractional-reserve banking is the current form of
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bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets.Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve
banking under which banks hold ...
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