If fractional reserve lending was outlawed and only full reserve lending was legal as a form of lending then that would reduce the prices of houses and rent relative to the average median income
Fractional reserve is what allows lending from deposits in the first place. If banks had to keep 100% of the reserves, they basically couldn't lend.
They'd have to have an extra pool of savings to lend from in addition to the money deposited by customers. Under such a system banks would charge customers a fee for storing their money, as opposed to giving them a dividend, since they wouldn't be able to profit off holding customer deposits.
@ArdainianRight @Humpleupagus @Monsignor_DickFace
"They'd have to have an extra pool of savings to lend from in addition to the money deposited by customers"
The customer would deposit money into two categories
1 Is money the depositor can access any time that can not be used for loans
2 Is money the bank is given permission to use for loans, but the bank depositor can not access for a certain tine frame. The bank depositor would earn a share of the profit the bank made off these loans.
@ArdainianRight @Humpleupagus @Monsignor_DickFace
For example a customer might have two accounts
1 A checking account that can be used any time
2 A savings account that can only be accessed during certain time frames
The bank can not lend the money in the customer checking account
The bank can lend money in the customer checking account to other customers and that customer earns a portion of the profit from these loans
They can only take money out of savings at designated times
@ArdainianRight @Humpleupagus @Monsignor_DickFace
This video explains how a customer could make money through a bank in a full reserve system
https://www.youtube.com/watch?v=bZ8g_1BmDf8
Fractional Reserve Banking vs Full Reserve Banking | How Do They Work?
EconClips
youtube
@ArdainianRight @Humpleupagus @Monsignor_DickFace
Another simpler way is the customer can put money in a checking account that earns no interest or negative interest for the protection fee
or give the bank money to lend to other customers they find in exchange for the bank sharing a portion of the profits from lending