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<p>[QUOTE=&quot;InfleXion, post: 1311533, member: 29012&quot;]The nature of fractional reserve banking is for a bank to use approx. 90% of its customers&#039; money for other purposes such as loans which they get to collect interest on, even though it&#039;s not their money. My point being that the fractional nature is applied in a way such as that the money they have in their vaults (or in modern times, readily available funds) is only a fraction of the total money they&#039;ve been provided with. Just because they only truly have 10% at their disposal doesn&#039;t mean the entire 100% isn&#039;t covered by the FDIC, notwithstanding that the $250,000 limit only applies to interest bearing accounts, where as non-interest bearing accounts have no limit through the end of 2012 due to a provision in the Dodd-Frank Act. So whether or not the deposits are FRNs or some other form of dollars doesn&#039;t impact how fractional reserve banking works.[/QUOTE]</p><p><br /></p>

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