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Federal Reserve Deposits : ウィキペディア英語版 | Federal Reserve Deposits
== History ==
The Federal Reserve when founded, worked very hard to integrate the individual banks in the United States. To this end, they prohibited private bank notes and limited banks to only creating deposits. The banks could create deposits (as governed by their reserve ratio) off of either gold or direct gold deposits at the Fed. Because the Fed offered convertibility between gold and these gold deposits, and they provided the legal means for banks to expand deposits under the reserve ratio, many banks chose to deposit their gold with the Federal Reserve. The advantage of Federal Reserve Deposits over Federal Reserve Notes was that it greatly facilitated interbank lending and check-clearing. This was because Federal Reserve Deposits while being valid money did not exist in paper form, so they were easy to transfer from bank to bank. These gold deposits would become known as Federal Reserve Deposits and quickly lost their 100% gold backing. During the Fed's inception, the Fed needed only to back gold deposits by 35%. This created a very dangerous situation because if more than 35% of banks demanded their Federal Reserve Deposits as gold, then the Fed would be insolvent. Such a crisis did happen in 1933 and Federal Reserve Deposits (as well as Federal Reserve Notes) lost their gold backing. Foreign governments were still allowed to be on the gold standard and their Federal Reserve Deposits were still redeemable in gold. But these too were only fractionally backed. This inevitably led to another gold run in 1971, led by heavy withdrawals by Switzerland (51 million) and France (191 million). Nixon chose instead of heavily devaluing the dollar against gold, to simply remove the US from the international gold standard.
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