Free Banking vs Full Reserve Banking

[Thread_Maker]

Hmmm...

 

[Conza88]

I think you'll need to amend the poll... Title says: "Free Banking vs Full Reserve Banking"

Poll says: Free Banking vs. Fractional Reserve Banking.

 

[robert68]

..

 

[anaconda]

What's "free banking?"

 

[Thread_Maker]

I think you'll need to amend the poll... Title says: "Free Banking vs Full Reserve Banking"

Poll says: Free Banking vs. Fractional Reserve Banking.

The Thread Maker made a mistake.

 

[headhawg7]

The Thread Maker made a mistake.

I think your paul krugman thread was a mistake as well.

 

[Sentient Void]

Well, I can't vote on this because the two selections are one in the same.

But if it was between Free Banking (which is Fractional Reserve Free Banking) vs Full Reserve enforced banking (this would *have* to be state mandated, btw)... then I would certainly pick 'Free Banking'.

Free Banking is fractional reserve banking, no regulations, no legal tender laws, no government / FDIC insurance, no central bank, etc. It is as it implies, absolutely 100% free market banking.

FRFB (fractional reserve free banking) is not only supported by Austrian Theory (and great austrian economists such as Mises, Hayek, Horwitz, Selgin, White, among others like Peter Schiff), but has also been the free market preference in free market times. However, there is absolutely *zero* shred of evidence that free(r) markets have selected a full reserve banking system over a competing fractional reserve free banking system.

In principle, fractional reserve banking is no different than a parking lot which rents out more tickets than it has spaces, on the assumption that not everyone will park there at once. This is a maximization of profit and thus most efficient use of available resources and allocating them effectively, most effectively according to the demands of consumers.

 

[wormyguy]

Free banking, if only because free competition must lead to (near) full-reserve banking, as the Austrian school shows. (I assume "full-reserve banking" here refers to a government mandate). I also assume the second poll option is a typo.

 

[kah13176]

Free banking doesn't necessarily imply fractional reserves. You can have a "free bank" that runs on full reserves. Only banks better fulfill their obligations when called upon.

 

[Wesker1982]

I don't care how you bank as long as it is voluntary

 

[Cutlerzzz]

"Fractional Reserve Banking vs Free Banking"

It looks like Full Reserve Banking will lose in the poll no matter what, for some reason.

 

[DamianTV]

Asking the wrong crowd. Fractional Reserve Banking is known to just about every member here to be a tool of Money Manipulation to deprive people of their property, by leveraging something that was created from nothing against things of real value.

 

[Zippyjuan]

Basically three different concepts. Free banking has no reserve requirements- they are voluntary. A fractional reserve bank is required to keep at least a minimum specified percent of deposits on hand (or on deposit with the Fed) they are not allowed to lend out. A full reserve bank is required to keep 100% of deposits on hand which makes lending dififcult.

http://en.wikipedia.org/wiki/Full-reserve_banking

Full-reserve banking, also known as 100% reserve banking, is a banking practice in which the full amount of each depositor's funds are kept in reserve, as cash or other highly liquid assets. In other words, funds deposited are not lent out by the bank as long as the depositor retains the legal right to withdraw the funds on demand.

 

[ChaosControl]

I'm not really fond of any kind of banking.

Full Reserve would be okay, then it is basically just a warehouse for your currency and not the big scam it is today. I dislike fractional reserve whether it is "free" or the manipulated nonsense that it is today.

 

[josh b]

Hayekian Free banking ftw.

With government out of the way of the monetary system there is no reason to enforce reserve requirements.

 

[Conza88]

This thread really needs to be deleted; and re-done again.

 

[Koz]

Hayekian Free banking ftw.

With government out of the way of the monetary system there is no reason to enforce reserve requirements.

Ding Ding we have a winner.

 

[Sola_Fide]

"Sound money and free banking are not impossible; they are merely illegal. That is why money must be deregulated…. In freedom, the money and banking industry can create sound and honest currencies, just as other free industries can provide efficient and reliable products." -Hans Sennholz

 

[Conza88]

Ding Ding we have a winner.

No, not a winner.

Why? Start a new proper thread and I'll bother to continue the discussion .

 

[nobody's_hero]

This thread really needs to be deleted; and re-done again.

Or it could just be deleted, and the search feature used.

I don't think, at this point, anyone is going to change their minds about where they stand on banking models anyway.