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Introduction to Fractional Reserve Banking

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  • Description
  • Outcome
  • Certification
  • Fractional reserve banking is a key concept in banking. It means banks maintain only a fraction of the total amount of money in all their customers’ deposit accounts as cash that is available for withdrawal by depositors. By doing this, banks free up large supplies of capital that can be loaned out to businesses, thereby helping to expand the economy. The economic system of most countries utilise this concept.

    This free online banking course explains in detail what fractional reserve banking is and how this banking system works. The course reviews the strengths and weaknesses of the fractional reserve banking system; for example, it helps economies grow but banks are also very vulnerable if there is a run on a bank and all depositors try to withdraw their money at the same time. As an alternative, full reserve banking is also explored and you will also see how money is accounted for in the balance sheets of banks.

    This free online banking course will be of great interest to professionals in the banking, finance, economics and business fields who would like a greater knowledge and understanding of fractional reserve banking and the strengths and weaknesses of this system of banking.

  • Learning outcomes:
    - Learn what fractions reserve banking is and how it works;
    - Understand what the main pros and cons of the system are;
    - Understand what the alternative, namely full reserve banking is;
    - Know what the different views of money are and how they are calculated;
    - Learn how banks present information about their key assets and liabilities;

  • All Alison courses are free to study. To successfully complete a course you must score 80% or higher in each course assessments. Upon successful completion of a course, you can choose to make your achievement formal by purchasing an official Alison Diploma, Certificate or PDF.

    Having an official Alison document is a great way to share your success. Plus it’s:

    • Ideal for including in CVs, job applications and portfolios
    • An indication of your ability to learn and achieve high results
    • An incentive to continue to empower yourself through learning
    • A tangible way of supporting the Alison mission to empower people everywhere through education.

Modules List( 2 )
  • INTRODUCTION TO FRACTIONAL RESERVE BANKING
  • Module 1: Introduction to Fractional Reserve Banking
    • Overview of Fractional Reserve Banking
    • Weaknesses of Fractional Reserve Lending
    • Full Reserve Banking
    • Money Supply- M0 M1 and M2
    • Simple Fractional Reserve Accounting part 1
    • Simple Fractional Reserve Accounting (part 2)
  • END OF COURSE ASSESSMENT
  • Module 2: Introduction to Fractional Reserve Banking Assessment
    • Introduction to Fractional Reserve Banking assessment
Topics List ( 1 )
Module 2: Introduction to Fractional Reserve Banking Assessment
You must score 80% or more to pass this assessment.
Course Features
  • Duration

    1-2 Hours

  • Publisher

    Khan Academy

  • Video

    Yes

  • Audio

    Yes

  • Assessment

    Yes

  • Certification

    Yes

  • Price

    Free

  • Reward

    50 Pts

  • Responsive

    No

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