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Comment by roflyear | Hacker News Reader

You can't give out loans really without fractional banking either. I mean you can. But not really.

The majority of business capitalization isn’t a loan, but invested savings in return for equity. All of venture capital, the stock market, small business using their own funds, etc.

Mortgages are collateralized, and business loans can be secured with assets or equity. I suspect the majority of bank loans are mortgages (?). Interest rates do not need to be high without fractional banking, since loans can be secured.

Who is going to issue mortgages, if not banks?

Banks only do community and jumbo in the us. Most mortgages are owned by the federal government

The federal government originates mortgages? TIL

Apparently the Fed owns 1/3 of all mortgage bonds.

https://mishtalk.com/economics/the-fed-now-owns-nearly-one-t...

… and ~25% of the Feds entire balance sheet is mortgage securities.

They don't originate those loans.

Banks can issue mortgages without fractional banking… Investors pool capital and start a bank. The bank loans money for homes and makes a profit from interest.

I suppose, but wouldn't really need a bank for that. And you need a lot of money - more money I'd wager than investors will want to pool together.

But, I guess if your goal is less people being able to get mortgages and loans, maybe it will be a good thing!

You could.

Banks, bolstered nightly with USD loans from this Fed, could not.

Well, you technically can, but few individuals will be issuing mortgages to the average joe.

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