I just give them a checking account.

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

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

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

So 10 of 110 is 11.

I'll open a bank account.

I have a fairly wealthy village.

He deposited the prize money in the bank.

I just give them a checking account.

You know, about my money.

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

Golden ratio

And we went the fractional reserve route.

I want to deposit some money.

I trusted him with the money.

So what would be total demand liabilities?

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.

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

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.

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,

So how much could I expand my balance sheet?

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.

Good morning, Melvin. Here's the money.

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.

We opened today.

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

She deposited a large sum of money in the bank.

Keep this money for me.

Your account is empty.

Put the money in the bank.

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

At the beginning of the week,

I'm in good shape, Mathilda. And I know I've got a lot of money with Tony, a lot.