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).

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Meanings

nounfractional reserve banking (uncountable)
  1. uncountablebankingA 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).

Translations

Chinese Mandarin 部分準備金銀行制度 /部分准备金银行制度
  • 部分準備金銀行制度 /部分准备金银行制度 (bùfen zhǔnbèijīn yínháng zhìdù)mode of banking
Finnish vähimmäisvarantojärjestelmä
  • vähimmäisvarantojärjestelmämode of banking
German Mindestreserve-System
  • Mindestreserve-Systemmode of banking
Polish bankowość rezerwy cząstkowej, system rezerwy cząstkowej
  • bankowość rezerwy cząstkowejmode of banking
  • system rezerwy cząstkowejmode of banking
Portuguese reserva fracionária
  • reserva fracionáriamode of banking
Cite this entry
APA

fractional reserve banking. (n.d.). In WatkinsX Dictionary. Retrieved November 5, 2026, from https://dictionary.watkinsx.com/word/fractional%20reserve%20banking

MLA

“fractional reserve banking.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/fractional%20reserve%20banking. Accessed November 5, 2026.

Chicago

WatkinsX Dictionary, s.v. “fractional reserve banking,” accessed November 5, 2026, https://dictionary.watkinsx.com/word/fractional%20reserve%20banking.

Source: fractional reserve banking on Wiktionary, CC BY-SA 4.0.