Chapter
Understanding the Basics of Banks
21:44 - 26:08 (04:24)
Banks make money by lending out the money they have to make more money. They can also borrow from other banks to satisfy the Fed's reserve requirements, known as the federal funds rate.
Clips
Banks borrow and lend money to each other on a daily basis, causing a panic and a run in one bank to spill over to other banks.
21:44 - 23:33 (01:48)
Summary
Banks borrow and lend money to each other on a daily basis, causing a panic and a run in one bank to spill over to other banks. The reserve requirement of banks is measured over a two-week average, which may lead to people withdrawing their money even if they are not panicked, to meet the requirement before a potential collapse.
ChapterUnderstanding the Basics of Banks
EpisodeThe Scintillating World of Interest Rates
PodcastStuff You Should Know
This podcast explains how the Federal Reserve works, including the discount rate and the federal funds rate.
23:33 - 25:21 (01:48)
Summary
This podcast explains how the Federal Reserve works, including the discount rate and the federal funds rate.
ChapterUnderstanding the Basics of Banks
EpisodeThe Scintillating World of Interest Rates
PodcastStuff You Should Know
During crop season, banks can get strained due to farmers needing loans to get their crops to market.
25:21 - 26:08 (00:46)
Summary
During crop season, banks can get strained due to farmers needing loans to get their crops to market. This has been portrayed in movies such as Raising Arizona and Wisdom.