Examlex
Which of the following is a disadvantage of the divisional structure?
Fractional Reserve
A banking system in which only a fraction of bank deposits are backed by actual cash on hand, with the rest being available for loans.
Banking System
The network of banks and financial institutions that provide financial services to consumers, businesses, and other banks.
Reserve Ratio
The fraction of deposits that a bank must hold in reserve and not lend out, as required by monetary authorities.
Reserve Ratio
The fraction of depositors' balances that banks must have on hand as cash, a requirement determined by the central bank.
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