Criticism of fractional-reserve banking

Okay kiddo, let's talk about money and how banks use it!

So, when we put our money in a bank, we trust that the bank will keep our money safe and we can withdraw it whenever we want. But actually, banks use our money to make more money for themselves.

This is called fractional-reserve banking. Basically, the bank only keeps a small fraction of our money on hand, and they lend out the rest to other people or businesses. For example, if you put $10 in the bank, they might keep $1 and lend out the other $9 to someone who needs a loan.

Now, this can be good for the economy because it means more people have access to money to start businesses or buy things they need. But some people think it's not fair because the bank is using our money to make money for themselves, and we don't really have control over where our money is going.

Plus, there's a risk that if too many people want to withdraw their money at the same time, the bank might not have enough cash on hand to give everyone their money back. This is called a "bank run" and it can make people lose confidence in the banking system.

So that's why some people criticize fractional-reserve banking. They think it's not fair, and there's a risk of instability if too many people try to get their money out of the bank all at once.