It&#x27;s called fractional reserve banking because they don&#x27;t have gold in their vaults, except for specific ratios. Very, very few banks have gold, instead they have government bonds. They don&#x27;t have those in 1:1 either.<p>In the EU: 2.5% of the value of your deposits the banks own in bonds.<p>In the US: complex, but let&#x27;s give a simple, not that wrong answer : up to 10%.<p>In Australia: 0% required, but in practice the banks have a little bit.<p>That&#x27;s all the banks have. In our current Bretton-woods economic systems, banks create (and destroy) money.