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And we went the fractional reserve route.

So that would be your savings account at period zero.

Put the money in the bank.

She put the money in the bank.

I've deposited the money in the bank.

Scarlett's deposits.

I just give them a checking account.

Don't trust him with such a large sum of money.

And then of course I have that 250,000.

I want to deposit some money.

Please deposit the money in a bank.

And let's say that I can, in the bank,

The bank keeps money for people.

I have 100 in terms of the building itself.

So what I do is, I take their 900 gold pieces, and I take it as a deposit.

So this is the account of B. The account of Villager B.

When you put money in the bank, you deposit it.

He has some money in the bank.

So let's just say I take another 100 gold pieces in deposits, 100 gold pieces of actual deposits.

Well, no. Because then a bank take on arbitrary amounts of risk and there are regulations, although I think a bank would do it on their own to some degree, but there're regulations called reserve requirements that tell us how much lending can a bank do relative to its actual reserves. In this case, it's reserves of gold.

So 10 of 110 is 11.

But it's the same idea.

At the beginning of the week,

So they need some place safe to put it.

That would be total bank notes in this case and bank notes are also something we'll later leave a world where every bank is issuing bank notes, but I just wanted to give you that kind of historical context, how bank notes even started off.

Checking,savings took out about 125,000 in cash.

So how can we do that?

There is a reserve requirement.

Oh, I have your winnings from last night.

It was the hardest hit of any country in the world.

He opened a checking account with the bank.

I'll open a bank account.

I have a fairly wealthy village.

So this is my equity.

Keep this money for me.

Your account is empty.

If this is 1,000, 900 might be about that.

I could've actually issued bank notes, same idea.

And then I have 200 gold pieces that I just put into my building just to start it off.

Let's say I take a 100 gold piece deposit, and of course I have an offsetting checking account that those people can at any point use either to write checks or at some point they can come back and demand their money back.

He deposited the prize money in the bank.

The money rests in a safe at the bank.