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

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

So 10 of 110 is 11.

He deposited the prize money in the bank.

I just give them a checking account.

The money rests in a safe at the bank.

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

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

I'll open a bank account.

I have a fairly wealthy village.

We borrowed money at high interest.

You know, about my money.

And I think something happened, right? He put aside a little cash for you.

It's in a safety deposit box.

Scarlett's deposits.

I have a lot of money in my savings account.

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.

This is actually the power of compounding interest.

So how much could I expand my balance sheet?

I want to deposit some money.

I trusted him with the money.

So what would be total demand liabilities?

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.

I put the money in a three year time deposit at the bank.

But it's the same idea.

I have 300 gold pieces of reserves

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

I also want 100 of that.

That's 100 , right?

We borrowed money at high interest.

The bank keeps money for people.

He left his safe in my care.

Deposits on long term leases.

I entrusted my money to him.

And then instead of giving them actual gold,

That's where all these people here put their money.

We opened today.

I mean, I could even have a denomination that's it could be a 500 gold piece.

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

And we went the fractional reserve route.

He has plenty of money in the bank.

I have 100 in terms of the building itself.

So how can we do that?

There is a reserve requirement.

Let me do that I'll do that in purple. These are checking accounts or notes deposit accounts for people.