Word.ws English Dictionary

fractional reserve banking

fractional reserve banking noun: a widespread banking system in which a bank that accepts deposits from the public puts the majority of those deposits into investments (generating a profit for the bank) as opposed to keeping them all in reserve (i.e., directly on hand); the system assumes that it is unlikely that every customer would need to withdraw their money at the same time (i.e., a bank run).

Noun

fractional reserve banking (uncountable)

  1. A widespread banking system in which a bank that accepts deposits from the public puts the majority of those deposits into investments (generating a profit for the bank) as opposed to keeping them all in reserve (i.e., directly on hand); the system assumes that it is unlikely that every customer would need to withdraw their money at the same time (i.e., a bank run).

Questions about fractional reserve banking

What does fractional reserve banking mean?
Fractional reserve banking means a widespread banking system in which a bank that accepts deposits from the public puts the majority of those deposits into investments (generating a profit for the bank) as opposed to keeping them all in reserve (i.e., directly on hand); the system assumes that it is unlikely that every customer would need to withdraw their money at the same time (i.e., a bank run).
What part of speech is fractional reserve banking?
Fractional reserve banking is a noun.

Words near fractional reserve banking in the dictionary

  1. fractional freezings
  2. fractional ideal
  3. fractional ideals
  4. fractional number
  5. fractional numbers
  6. fractional reserve banking
  7. fractional rig
  8. fractional volume
  9. fractional volumes
  10. fractionalisation
  11. fractionalisations

Source and license

Adapted from Wiktionary: fractional reserve banking (page history and authors). Text available under the Creative Commons Attribution-ShareAlike 4.0 license. Word.ws reformatted the entry and added links. Wiktionary data of 2026-09-02.

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Cite this entry: “fractional reserve banking.” Word.ws, https://word.ws/fractional_reserve_banking. Based on Wiktionary, CC BY-SA 4.0.