Modern banking is a giant confidence game. Banks accept cash from depositors, then lend the money to borrowers, while simultaneously promising the depositor instant access to their cash. This would be fraud in any other context. For banks, it’s routine business. Our banking system is essentially a giant bet that only a few depositors will withdraw their cash on any given day. The Federal Reserve’s lending window can cover this, but the entire pyramid scheme could still collapse if enough depositors ever lose confidence in it. Read the entire Money News article here.