How banks make money | UK retail banking ft. Sarah Kocianski | 11:FS Explores Lightboards

In this video, our Head of Research, Sarah Kocianski, unpacks exactly how banks make money - with the handy edition of a super cool #lightboard!
Fractional-reserve banking, the most common form of banking practiced by commercial banks, involves banks accepting deposits from customers and making loans to other borrowers - while holding in reserve a fraction of the bank's deposit liabilities. The vast majority of interest made on loans is kept by the bank, and then a small amount of savings rate interest is given back to the customer for keeping their deposit with the bank.
But allow Sarah to explain a little further!

[@stuartporteous7762]

I've seen videos showing completely different understandings of how banks operate. It's WILD how something so fundamental in society is understood and explained differently by the educated folk.

[@johnsmith99997]

The UK hasnt had reserve requirements since 1981, Capital requirements/Basel determine what reserves UK banks need

[@ravibankingbriefs604]

Nice information

[@edgardvillanueva-cruz9543]

Love it thank you 💜💪🏽

[@osakuadeifeoluwa1210]

THIS IS THE OLD FRAMEWORK. BANKS DO NOT NEED YOUR MONEY TO MAKE LOANS.

[@grassytramtracks]

Well whose money do they lend out then?

[@karstent.66]

@@grassytramtracks Have you any idea how money is created?

[@sundalmurugan4208]

Nope! money is created by the lending banks!

[@titsonafish]

It's all imaginary.