Without fractional reserve system, the banks will all die because they really have no profit margin at all.
Not true at all. Banks just have to learn to charge interest commensurate with risk. Those that do prosper, those that don’t die. What turned lending into a commodity business was the govt regulating who could get a loan and by what criteria. As soon as that happened, then yes banks are just brokers working off very thin margins. They aren’t taking any risk, so why a broker be an extremely profitable business?
Josh
